In the loop

What you should know this morning:

• The rand is weaker this morning, at R16.65/$, after closing weaker yesterday (R16.48/$*).
• EM currencies were mixed yesterday; the RUB (+1.1%), BRL (+0.6%) and THB (+0.1%) were the biggest gainers; the CLP (-0.8%), ZAR (-0.4%) and PHP (-0.4%) were the biggest losers.
• Asian equity markets, the Nikkei, Hang Seng and  Shanghai Composite are down this morning.

• Iran war: President Trump has said China is willing to support negotiations with Iran.
• President Trump continues to press for a diplomatic solution to end the conflict and reopen the Strait of Hormuz.
• While the US-Iran ceasefire has largely held since 8 April, negotiations remain stalled.
• Iran continues to resist US demands to reopen the Strait, instead calling for an end to the US naval blockade and the lifting of sanctions.

• Trump-Xi Summit: the second and final day of the Trump-Xi summit in Beijing focused on consolidating areas of cooperation while underscoring persistent strategic tensions, with no major breakthrough agreements announced.
• Discussions continued to centre on trade, energy, and the Iran conflict, with both sides seeking to preserve an earlier trade truce and advance incremental deals.

• Fed Governor Stephen Miran said yesterday that he plans to step down from the Federal Reserve once incoming Chair Kevin Warsh is sworn into office, or shortly beforehand.
• Miran's departure had been widely anticipated, as Warsh is set to assume his seat on the Fed's Board of Governors.
• Miran has been openly critical of the Fed's approach to measuring inflation.
• He warned that failure to correct these shortcomings risks pushing unemployment higher than necessary by tightening policy in response to perceived rather than genuine inflation pressures.
• He also voiced support for the reforms Warsh intends to pursue, including changes to the Fed's communications framework and balance-sheet policies.

• New York Fed President John Williams yesterday said that monetary policy is currently “in a good place” and remains “mildly restrictive”.
• Williams noted that he sees no reason at present to either raise or lower interest rates. 
• However, he added that he is beginning to observe “some issues” emerging in indicators such as the New York Fed's Global Supply Chain Pressure Index.
• He also said that goods prices should stabilise and eventually begin to decline as the effects of tariffs continue to work their way through the economy.

• The Empire State manufacturing index for May, due out today, is likely to have fallen to 7.5, from 11.0 in April.
• Industrial production and manufacturing output are also on the cards today.

• Locally, it's a quiet day as far as data releases are concerned.

• Brent crude is up this morning, and up by 76.3% year-to-date.
• The gold price is down this morning, and up by 5.7% year-to-date.

• Brent crude oil is currently at $107.23/bbl; ($105.72/bbl*).
• Gold is at $4564/oz ($4678/oz*).
• SA CDS 147bps**, Brazil 122bps* and Turkey 234bps*.
• Yields: US 10yr at 4.51%*, German bund at 3.04%*, SA 10-year generic at 8.81%*, SA's R2035 at 8.64%*.

* Denotes yesterday's close.

Key events and data:

• 09h00: China BOP current account balance (Q1:26)10h00: Eurozone ECB publishes economic bulletin
• 14h30: US Empire manufacturing index (May)
• 15h15: US industrial production (April), manufacturing production (April), capacity utilisation (April)

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