Daily Market Report – 10 Apr 2025
Markets Rebound on Tariff Pause, but SA’s Local Politics Still a Drag
Global Market Mood Flips on Trump’s “Tariff Truce”
Markets staged a massive comeback overnight as President Trump paused the reciprocal tariffs for 90 days, while hiking China’s tariffs to 125%. The optics? Trump blinked — signalling he’s open to renegotiation amid political, financial, and legal pressure.
- S&P 500: +9.5%
- Nasdaq: +12.0%
- Dow Jones: +7.9%
- ZAR: Rallied from 19.93 to sub-19.30 against the USD
Investors are now hoping this pause becomes a pivot to negotiation, particularly if China refrains from escalating further. Markets are sensing a pathway to a “zero-for-zero” trade regime that could unlock upside for risk assets globally.
ZAR Performance – Reversal Underway, but Political Risk Remains
- Spot: 19.29
- Range: 19.00 – 19.43
- Resistance: 19.43 (now flipped from support)
- Support: 19.0000
While the global backdrop has shifted positively, the ZAR remains discounted due to local political fractures. The GNU remains shaky, the VAT hike is in limbo, and uncertainty over budget passage in May/June lingers. Any constructive update on GNU unity or budget consensus could catalyse another ZAR rally.
Local Political Snapshot – GNU’s Survival Still Unclear
- Mashatile presses DA to show GNU commitment.
- DA’s legal challenge to VAT hike still unresolved.
- Smaller parties (BOSA, Action SA) haven’t committed to supporting the budget.
- GNU delegation to Israel raises ideological tensions inside coalition.
Key risk event: Appropriations and Revenue Bills vote in May/June. If no GNU compromise, ANC will likely struggle to pass these without concessions.
Bond Market – Looking for Fiscal Signals Amid ZAR Recovery
- SAGB yields remain elevated but stabilised yesterday.
- Vanilla bond auction today to test investor appetite.
- A constructive budget resolution or GNU unity signal could compress yields rapidly.
ZAR strength + lower inflation = opportunity for real yields to attract global buyers. But execution risk is high. Political clarity needed.
FRAs – SARB Cuts Back in Focus
| FRA Tenor | Rate Cut Expectations |
|---|---|
| 3X6 | 29bp |
| 6X9 | -54bp |
| 9X12 | -58bp |
| 12X15 | -56bp |
With Fed funds futures now pricing ~75bp cuts by year-end, the FRA curve reflects a dovish tilt for SARB as well. SARB has cover to cut — if ZAR stability holds.
Global Watchlist – What’s Next?
- China’s Response – Will Beijing retaliate further or negotiate?
- US Legal Battle – Will the Supreme Court take up the tariff constitutionality challenge?
- GNU Stability – Can Ramaphosa contain the coalition tension?
- ZAR Path – Can fair value (~17.80–18.20) be retested with political alignment?
Why choose TreasuryONE
Minimise the impact of market volatility on your bottom line by getting access to an experienced team of dealers that provides expert market advice – validated by facts and figures, not feelings or hearsay.
We customise risk management strategies to achieve the most competitive rates in a fast-moving and complex marketplace.
We provide effective and measurable processes for managing:
- Exchange Rate Risk arises when an organisation conducts business in multiple currencies, either through exports and imports, or through foreign operations.
- Commodity Price Risk is the financial risk posed to an entity’s financial performance and profitability by fluctuations in commodity prices that are primarily driven by external market forces and are therefore beyond the entity’s control.
- Interest Rate Risk management for companies involves identifying, measuring, and managing the potential impact of changes in interest rates on a company’s financial position and profitability.