Download Weekly Note - 21 July 2025
Local Market Update:
South African markets posted solid gains last week, supported by improved global risk sentiment and stabilising domestic macro signals. Investor focus was centred on upcoming June CPI and May business cycle indicators, which are expected to influence the SARB’s monetary policy stance in the second half of the year. In the corporate space, Takealot Group announced a significant expansion of its Mr D delivery platform, repositioning it as a broader on-demand convenience service amid intensifying e-commerce competition. Separately, the G20 finance ministers' meeting held in Johannesburg placed emphasis on central bank independence, particularly within emerging markets navigating persistent inflation, climate-linked risks and rising geopolitical uncertainty.
European Market Update:
European equity markets were range-bound last week as investors balanced soft macroeconomic indicators with a wave of corporate earnings. In the UK, insolvency statistics showed a notable decline, offering some signs of resilience in the business sector despite a subdued growth backdrop. Meanwhile, the European Union advanced its 18th sanctions package against Russia, introducing tighter banking restrictions and new price caps on energy exports. This move reignited focus on the bloc’s energy security and inflation trajectory. With the European Central Bank widely expected to hold rates steady at upcoming meetings, investor attention shifted toward corporate earnings guidance and trade-policy risks.
US Market Update:
US markets experienced a relatively stable week, buoyed by robust consumer data and cautious optimism around a potential soft landing. Retail sales surprised to the upside, supported by steady jobless claims and improved consumer sentiment. However, a slowdown in residential construction raised questions about housing market momentum. Monetary policy remained a central focus, with Federal Reserve officials signalling a data-dependent approach amid conflicting economic signals. While earlier in the week equities touched new highs, sentiment was tempered by renewed rhetoric on trade and tariffs, particularly between the US and key Asian partners.
Asia Market Update:
Asian markets delivered mixed returns last week, with performance shaped by tech-sector resilience and growing political uncertainty in Japan. Semiconductor stocks, particularly in Taiwan and South Korea, rallied following record earnings from TSMC, reinforcing optimism in the global chip cycle. However, the Nikkei underperformed amid pre-election volatility ahead of Japan’s upper-house vote, where potential fiscal policy changes are under close scrutiny. Economic data across the region remained uneven, with subdued export figures in China contrasting with more stable industrial activity in India. Currency movements also shaped investor sentiment, particularly for Japan and China, where monetary divergence with the West continues to drive capital flows.
Currency Market Update:
Currency markets reflected a cautious tone last week as monetary policy divergence and geopolitical risks drove cross-border flows. The US dollar softened modestly as expectations for aggressive rate cuts diminished, while the euro and sterling gained ground on improved sentiment in European equity markets and easing recession concerns. The Japanese yen remained under pressure, weighed down by political uncertainty and the Bank of Japan’s continued policy divergence from its global peers. Emerging market currencies were mixed, with the South African rand gaining on G20-related optimism and improved risk appetite.
Commodity Market Update:
Commodity markets posted modest weekly gains, supported by geopolitical developments and investor positioning ahead of the northern hemisphere’s second-half demand cycle. Oil markets were particularly sensitive to the EU’s newest sanctions on Russia, which included stricter measures on energy trade and logistics. These raised fresh concerns over supply constraints, boosting energy-related sentiment despite demand-side uncertainty. Precious metals gained modestly as geopolitical tensions and real yield dynamics underpinned a steady safe-haven bid, though momentum moderated by week’s end. Industrial metals saw mixed performance, with supply-side constraints balanced against uncertain Chinese demand.