Daily Market Report 15 May

Daily Market Report – 15 May 2025

Local Pressures: Mining, Policy Paralysis, and Strategic Gambits

Mining Malaise

  • March Mining Production Forecast: Expected at -4.6% y/y
  • Follows February’s -9.6%
  • SA, once a global mining leader, now faces:
    • Ageing infrastructure
    • Regulatory drag
    • High operational costs
    • Power disruptions

Ramaphosa’s High-Stakes Washington Trip

Ramaphosa plans to:

  • Offer US gas supply deals and exploration rights
  • Counteract Trump’s dissatisfaction with:
    • SA’s ICC Israel referral
    • Russia-Iran-China alliances
    • Anti-US voting patterns in multilateral forums

ZAR Outlook: Resilient but Capped

USD Dominance: No Better Alternatives

  • USD is overvalued, but:
    • EUR suffers weak growth + investment drought
    • CNY is a managed float, weaponised for export
    • JPY/KRW influenced by geopolitical intervention speculation

USD-ZAR Snapshot

  • Spot: 18.2450
  • Range: 18.13 – 18.45
  • Support: 18.1800 (200DMA)
  • Resistance: 18.4500 (Fibo zone)

Momentum Check

  • Oversold stochastic indicators
  • Rangebound pattern, awaiting S&P verdict, mining data, and US data dump

Fixed Income: Market in Holding Pattern

Bond Sentiment

  • Recent auction demand strong
  • But economic malaise + political tension = upside yield risk
  • S&P rating call Friday is critical; outlook upgrade could narrow spreads

FRA Curve: Cut Expectations Flatten Out

FRA Tenor Implied Rate Cut
2X5 25bp
3X6 39bp
6X9 45bp
9X12 50bp
12X15 50bp
  • Two SARB rate cuts still priced in for 2025
  • ZAR resilience + no inflation surprises = status quo FRA positioning

Global Macro: Currency Accord Chatter, Data Deluge Ahead

US Dollar

  • Strong, but fragile
  • Held up by lack of credible alternatives
  • Yield curve steepening (10Y at 4.536%) on:
    • Tariff pause
    • Tax cut hopes
    • Reduced recession fears

Data Watch

  • Retail Sales
  • PPI (inflation)
  • Jobless Claims

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