Download Weekly Note - 30 June 2025
Local Market Update:
The Johannesburg Stock Exchange (JSE) continued to face sustained foreign investor outflows, amounting to $3.7 billion since October, representing the longest such run in five years and exerting pressure on local equities and the rand. Nevertheless, economic indicators point to a measured recovery, with GDP growth forecast at 1.7% for 2025, underpinned by structural reforms and a 25-basis-point interest rate cut earlier this year. Persistent headwinds include fragile consumer confidence and elevated unemployment levels, though ongoing fiscal consolidation and robust commodity export revenues provide some buffer for medium-term stability.
European Market Update:
European equity markets rallied last week, with benchmark indices such as the DAX and FTSE 100 registering gains supported by broadly constructive macroeconomic data. Investor risk appetite was bolstered by favourable trade developments, notably Canada’s withdrawal of its digital services tax, easing tariff-related uncertainties and encouraging cross-border capital flows. However, inflation remains a key risk factor as the European Central Bank weighs the delicate balance between sustaining growth momentum and managing persistent price pressures across member economies.
US Market Update:
U.S. equity markets extended their bullish trajectory, with the S&P 500 and Nasdaq Composite hitting new highs, supported by resilient corporate earnings and robust consumer spending data. The positive momentum was further underpinned by easing trade tensions and market expectations of forthcoming Federal Reserve rate cuts, while the technology sector continued to lead gains. Investors, however, maintain vigilance on inflation trends and key economic releases that could recalibrate monetary policy outlooks in the near term.
Asia Market Update:
Asian markets posted solid gains, led by the Nikkei 225, as investor sentiment improved on signs of thawing U.S.-China trade relations and a weaker U.S. dollar backdrop. The Indian rupee appreciated by 1.3%, its strongest move in over two years, supported by lower crude oil prices and increased foreign direct investment inflows. Meanwhile, China’s measured reopening efforts and targeted stimulus measures bolstered regional market optimism, although geopolitical tensions and regulatory uncertainties continue to temper risk appetite.
Currency Market Update:
The U.S. dollar extended its sixth straight month of depreciation, pressured by market anticipation of Federal Reserve rate cuts and speculation around potential leadership changes at the Fed. Concurrently, emerging market currencies, led by the Indian rupee and Chinese yuan, strengthened on improved trade relations and stabilising growth expectations. Elevated currency volatility remains a feature ahead of critical central bank meetings and ongoing geopolitical developments, underscoring cautious positioning among FX investors.
Commodity Market Update:
Commodity markets exhibited heightened volatility last week, with crude oil prices retreating 12% amid easing geopolitical tensions in the Middle East and a stronger U.S. dollar dampening demand prospects. Precious metals, including gold and silver, also declined as risk-off demand faded, while industrial metals experienced mixed performance reflective of evolving global growth dynamics. Notably, platinum surged 28.1% in June to a decade peak, driven by supply constraints, robust automotive sector demand, and tightening fundamentals across the market.