Daily Market Report – 10 Sep 2025

South Africa’s GDP Beats Forecasts but Remains Fragile

South Africa’s economy grew by 0.8% q/q in Q2, up from 0.1% in Q1, slightly outperforming expectations of 0.6%. Mining (+3.7%) and manufacturing (+1.8%) drove the rebound, with eight of ten sectors showing improvement.

Yet, the uptick masks structural weakness: only four sectors exceeded 1% growth, and overall 2025 growth is still likely to remain below 1%. Declining investment—now just 14% of GDP—limits prospects for sustained expansion. Business confidence has slipped again, and consumption continues to dominate, underlining long-term fragility.

Pretoria Sends Second Delegation to Washington Over Tariffs

South Africa has dispatched a second delegation to the US to negotiate relief from 30% tariffs imposed by the Trump administration. Officials will engage with US lawmakers and businesses to seek a “mutually beneficial” trade arrangement.

However, Pretoria’s alignment with BRICS, its ties to Russia and Iran, and its confrontational stance toward Israel may complicate talks. Analysts caution that these geopolitical factors could overshadow any transactional approach by Washington.

Rand Holds Bullish Tone Despite USD Recovery

The rand weakened slightly to 17.51/$, giving up some gains as the dollar rebounded on geopolitical tensions and court risks to Trump’s tariffs. Still, strong equity markets and risk appetite kept the ZAR supported.

Investors are pricing in 100bp of Fed cuts by April 2026, which should support emerging-market currencies. Analysts see the ZAR retaining a bullish bias into the weekend, especially if South Africa’s current account data shows further improvement.

Bond Auction Demand Strengthens on ZAR Support

US bond yields edged higher despite the dramatic downward revision to labour data (-911k jobs). Relief that the revision was smaller than feared buoyed Treasuries.

Locally, demand for SAGBs improved, with bids rising to R13.7bn from R9.1bn the prior week. A stronger ZAR helped drive inflows, cushioning seasonal September–October softness. FRA pricing has stabilised, with markets expecting two 25bp SARB cuts over the next year.

Oil Rises on Middle East Tensions, Supply Outlook Capped

Oil prices gained for a third day, with Brent near $67 and WTI at $63, after Israel struck Hamas leaders in Qatar and Trump threatened tariffs on Russian crude buyers. Gains were capped by rising inventories and OPEC+ supply plans.

Soybean meal rose 1% on tight US supply, while soybean oil fell 1.1% amid biofuel policy uncertainty. Corn and wheat were little changed ahead of Friday’s USDA report.

Gold Nears Records as Fed Cuts Loom

Gold steadied around $3,635/oz, just shy of record highs, supported by Fed easing bets, geopolitical risks, and strong central bank buying. The metal is up nearly 40% this year, with analysts suggesting further gains if rate cuts deepen.

Meanwhile, Teck Resources and Anglo American announced a landmark $50bn merger, creating one of the world’s largest copper producers. The deal is expected to boost annual output by 175,000 tons but faces political and shareholder hurdles.

Global Macro: US Jobs Revised Lower, China Back in Deflation

The US labour market was much weaker than initially thought, with job growth revised down by 911,000 for the year to March. This bolsters the case for a Fed rate cut on 17 September.

China slipped back into deflation in August, with CPI at -0.4% y/y and PPI contracting for the 35th straight month (-2.9%). While core inflation improved to 0.9%, weak domestic demand and overcapacity continue to weigh on growth.

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