Daily Market Report – 14 July 2025

Ramaphosa Launches Major Inquiry into State Corruption

In a dramatic turn in South Africa’s ongoing fight against corruption, President Cyril Ramaphosa has announced the formation of a judicial commission of inquiry to investigate entrenched criminal networks within the state’s security structures. Headed by Acting Deputy Chief Justice Mbuyiseli Madlanga, the commission will probe allegations of cartel activity, political interference, and criminal infiltration within the police, intelligence services, and prosecution authorities.

The announcement follows claims implicating Police Minister Senzo Mchunu, who has been placed on special leave, in covering up politically motivated assassinations. Professor Firoz Cachalia has been appointed as interim police minister. This initiative, dubbed the most significant anti-corruption probe since the Zondo Commission, aims to restore institutional trust by recommending prosecutions and reforms across several key state entities.

ANC Grapples with GNU Role Amid Internal Tensions

The ANC will hold a pivotal National Executive Committee (NEC) meeting this week to determine its future in the Government of National Unity (GNU). Party insiders will debate whether continued collaboration with the DA is politically tenable. While internal divisions remain, analysts argue that engaging with centrist parties may be more pragmatic than aligning with fringe ideological groups.

The NEC will also prepare for the upcoming National General Council, marking a key moment of introspection for the ANC as it seeks to reestablish credibility following electoral losses and governance missteps.

Mining Sector Faces Another Blow Amid Policy Uncertainty

South Africa’s mining sector is expected to post yet another contraction when production figures are released later this week. Preliminary data from April revealed a -7.7% y/y drop in output—the sixth consecutive monthly decline. The fall is attributed to weak investment, policy ambiguity, and regulatory missteps, including backlash over the new Mineral Resources Development Bill (MRDP), which has sapped investor confidence.

Despite boasting abundant natural resources, the sector’s deterioration underscores the country’s broader de-industrialization trend, driven by legislative inertia and administrative inefficiencies.

Trump Hits Europe and Mexico with Tariff Blitz

On the global stage, US President Donald Trump announced sweeping 30% tariffs on imports from the EU and Mexico, escalating tensions ahead of a looming August 1 deadline. The EU has extended a suspension of retaliatory tariffs, seeking a diplomatic solution. Markets remain jittery, with Trump’s moves perceived as both a negotiating tactic and a short-term revenue mechanism for the US’s widening fiscal deficit.

ZAR Weakens Amid Corruption Fallout and Tariff Shock

The rand lost ground on Friday as markets reacted to South Africa’s corruption revelations and global trade risks. The USD-ZAR breached the 18.00 mark, though analysts caution against bearish overreaction. Despite short-term pressure, the rand retains medium-term support from high carry returns, a positive trade balance, and relatively strong terms of trade.

Technical indicators suggest a temporary consolidation phase, with key resistance at 18.15 and short-term support near 17.80.

Rising Global Yields Pressure SA Bonds

US and Japanese bond yields climbed as inflation concerns resurfaced and markets priced in a more hawkish Fed. South Africa’s bonds followed suit, with the 10-year yield rising to 9.08%. Analysts point to SA’s enduring risk premium—driven by governance failures and fiscal indiscipline—as necessitating higher yields to attract investment.

Forward Rate Agreements (FRAs) suggest limited room for further rate cuts, especially if ZAR depreciation continues and inflation pressures re-emerge.

Commodity Markets: Silver Soars, Corn Dips

Silver prices surged to a 14-year high, buoyed by industrial demand and investor hedging amid tariff fears. Meanwhile, corn futures fell despite bullish USDA data, with favorable weather allowing traders to short the market. Oil markets remained rangebound, hovering near $70 a barrel, as trade concerns offset easing geopolitical risks.

China’s Exports Rebound, EU Eyes Retaliation

China’s exports rose 5.8% y/y in June, supported by reduced tariffs and solid global demand, helping to generate a $115 billion trade surplus. However, looming US tariffs could curb momentum in H2 2025.

In Europe, the EU is preparing countermeasures worth €72 billion if negotiations with Washington fail. Trump has threatened a 30% tariff on EU exports starting next month, pressuring European leaders into seeking trade alliances with other major economies.

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