Download Weekly Note - 02 March 2026
Local Market Update:
South Africa’s macro backdrop reflected mixed signals, with Sasol reporting a 34% decline in interim HEPS to R9.27 amid weaker commodity prices. Leading indicator data contracted 1.0% month-on-month, pointing to softer near-term growth momentum. However, inflation dynamics improved, with January PPI easing to 2.2% year-on-year, supported by lower fuel costs and a firmer rand. External accounts surprised positively, with a R9.31 billion trade surplus, while private sector credit growth remained resilient. National Treasury’s proposed fiscal anchor reinforces medium-term discipline, although a R69.7 billion budget deficit underscores ongoing fiscal pressure.
European Market Update:
European macro conditions remain broadly stable, with inflation anchored near the ECB’s 2% target, supported by softer energy prices and lower-cost imports. However, growth signals remain mixed, with weaker German consumer sentiment and labour market softness pointing to fragile underlying demand. Structural developments remain in focus, with the Bank of England’s planned CHAPS enhancements reflecting ongoing payment system modernisation, while UK vehicle production contracted sharply amid subdued external demand. ECB commentary suggests AI adoption has yet to materially disrupt labour markets, reinforcing a gradual and measured transition outlook.
US Market Update:
U.S. macro conditions reflected a higher-for-longer policy bias, with a stronger-than-expected PPI print reinforcing expectations that the Federal Reserve will keep rates unchanged in March, with markets pricing a 94% probability. Severe winter storms introduced short-term economic disruption, particularly across travel. Fed commentary remained balanced, highlighting both labour market resilience and potential risks, while political developments added to uncertainty. Nvidia’s earnings beat supported confidence in AI-driven investment, while mortgage rates eased to 5.98%, although housing demand remains constrained by limited supply.
Asia Market Update:
Asia-Pacific markets reflected a cautiously tightening policy backdrop, with Tokyo core inflation dipping below 2%, supporting expectations of gradual Bank of Japan normalisation despite rising services inflation of 2.6% year-on-year. China maintained a measured stance, holding benchmark lending rates steady for a ninth consecutive month, signalling limited scope for broad stimulus, although Hong Kong’s IPO activity points to improving capital markets conditions. South Korea kept rates unchanged at 2.50% with a prolonged pause expected, while stronger Australian inflation reinforces a more hawkish regional policy outlook.
Currency Market Update:
Currency markets initially reflected a softer dollar, with the rand strengthening following South Africa’s national budget, signalling improved fiscal visibility. Sterling also firmed against both the dollar and euro, supported by favourable rate differentials. However, more recently, escalating Middle East tensions have driven a reversal, with safe-haven flows boosting the dollar and Swiss franc, while the euro weakened. Heightened geopolitical risk, including strikes on Iran and retaliation targeting energy infrastructure, continues to support defensive positioning and elevated volatility across currency markets.
Commodity Market Update:
Commodity markets remained supported, with oil prices holding near seven-month highs amid U.S.–Iran tensions and supply disruption risks. Gains were partially capped by rising U.S. inventories and expectations of higher OPEC+ output, including planned increases from Saudi Arabia. Gold edged higher on a softer dollar and sustained safe-haven demand. More recently, oil rallied sharply as Middle East conflict escalated, raising concerns around broader regional disruption. Focus has shifted to the Strait of Hormuz, a key energy corridor, where rising security risks continue to underpin prices and reinforce global inflationary pressures.