Download Weekly Note - 11 August 2025
Local Market Update:
South African markets remained volatile as the country absorbed the full impact of the US’s 30% tariff on key exports, including wine, citrus, and vehicle components. The JSE All Share index pulled back slightly after three weeks of gains, as investors reassessed trade and earnings risk. Government is reallocating funding to support affected sectors, while exporters begin seeking alternative markets in Asia and the Middle East. Meanwhile, Eskom reported ongoing diesel reliance, raising fiscal concerns. Upcoming data on manufacturing and mining will offer insights into the broader economic drag as trade headwinds and power insecurity continue to bite.
European Market Update:
European equity markets fell for a second week, with the STOXX 600 down nearly 2%, driven by weakness in retail, banking, and industrials. The Bank of England cut interest rates by 25 basis points to 4%, citing ongoing disinflation and weak consumer demand. The FTSE 100 slipped, while the euro held steady despite growing political instability in Eastern Europe. Corporate headlines included Volkswagen’s profit warning and BP’s flat Q2 earnings. Meanwhile, Brussels urged G7 alignment on trade retaliation ahead of the Trump–Putin summit. Investors are reassessing equity exposures amid growing concern over growth, margins, and policy fragmentation across the region.
US Market Update:
US markets extended their rally, with the Nasdaq reaching a new all-time high and the S&P 500 closing within 1% of its July peak. Strong earnings from Apple, Nvidia, and consumer stocks helped offset broader economic concerns. However, investor focus is now squarely on Tuesday’s CPI release, as stagflation risks loom. July jobs data showed slower hiring and wage growth, prompting speculation of a possible September rate cut. Additionally, the Biden administration launched legal reviews of Trump-era tariffs, signalling possible policy reversals. Bond markets held steady, with the 10-year Treasury yield hovering near 3.9% on balanced growth and inflation signals.
Asia Market Update:
Asian equities posted solid gains, led by China and Japan, as investors responded to supportive policy signals and robust fund inflows. China’s central bank cut the reserve requirement ratio for a second time this year, boosting liquidity and investor confidence. The Nikkei 225 inched closer to record highs, helped by chipmakers and auto stocks. However, China’s deflationary signals persisted, with July’s PPI falling for the 17th consecutive month. Regional trade data showed mixed results, reflecting fragile global demand. Sentiment remains positive in the near term, though risk remains around renewed US–China trade tensions and the implications of a stronger US dollar.
Currency Market Update:
The dollar weakened slightly on dovish Fed expectations, as investors increasingly price in a September rate cut following soft US labour market data. The euro and sterling gained modestly, supported by relatively hawkish ECB and BoE communication. The South African rand rallied toward R18.05/USD, buoyed by stronger risk sentiment and a rebound in emerging market inflows. However, volatility remains elevated, particularly as trade tensions escalate and currency markets react to inflation surprises. Yen trading was muted due to a holiday-shortened week in Japan, but markets are watching closely for intervention amid renewed depreciation pressures and BoJ policy uncertainty.
Commodity Market Update:
Oil prices declined for a second straight week, with Brent settling near $84 per barrel, as traders anticipated a potential breakthrough in US–Russia talks that could ease sanctions and increase global supply. WTI futures also slipped, pressured by rising US inventories. Gold prices moderated to $2,345/oz as geopolitical tension eased and risk appetite improved. Industrial metals were mixed—copper rose slightly on China stimulus hopes, while aluminium declined on weak European output. Markets remain highly sensitive to macro data, particularly US inflation and interest rate signals, which will likely dictate near-term positioning across energy, metals, and soft commodities.