Trump’s $3.4 Trillion Bill Set for Signature

President Donald Trump is poised to sign the “One Big Beautiful Bill Act” into law today, after it narrowly passed the House (218–214) and Senate (51–50). The sweeping $3.4 trillion fiscal package extends the 2017 tax cuts, boosts spending on defence and immigration, tightens welfare eligibility, and reverses Biden-era clean energy policies. It also raises the debt ceiling by $5 trillion, forestalling default concerns but intensifying worries over long-term US fiscal stability.

The bill is a central pillar of Trump’s nationalist economic agenda, aiming to stimulate growth through deregulation and a shift to domestic production. Analysts warn that while the bill may boost demand short-term, it’s unclear whether GDP growth can keep pace with the massive spending increase.

ZAR Benefits from Strong Terms of Trade and Weak USD

The rand traded at 17.5050/USD at the time of writing, on the back of:

• A slide in the USD due to fiscal uncertainties and tariff threats.
• A robust SA terms-of-trade position, with rising gold and platinum prices and falling oil prices.
• SA’s strong showing in ETM’s carry attractiveness index and hopes of a FATF greylist exit.

Despite SA’s structural economic issues, the ZAR continues to defy expectations and is likely to test the 17.30/USD level, with short-term resistance seen at 17.6500.

Bond Market Rally Fueled by ZAR Strength

South African bonds remain supported, with yields falling in line with the appreciating rand. The latest ILB auction may struggle again, as inflation hedging demand weakens amid a strengthening currency and subdued inflation.

The FRA market suggests one SARB rate cut is priced in for H2 2025, with a second cut unlikely unless inflation drops closer to 3%. Overall, the ZAR’s strength is bolstering vanilla bonds, though inflation-linked bonds may see less interest.

OPEC+ Eyes Output Hike, Oil Steady Ahead of Meeting

Oil prices held steady with Brent near $69 and WTI above $67 per barrel. OPEC+ ministers are expected to approve a fourth consecutive 411,000 bpd production hike for August. This comes amid declining demand, economic uncertainty, and US-Iran geopolitical tensions.

Meanwhile, Canadian wildfires and declining output from Mexico and Venezuela are supporting prices for heavy crude.

India’s Monsoon Rains Raise Crop Prospects

India’s early and widespread monsoon rains have accelerated sowing of rice, pulses, and oilseeds, setting the stage for a potential record harvest. The government is leveraging this with policies to boost diversification, ethanol production, and rural incomes, ensuring ample seed and fertilizer supplies.

Platinum Soars on Supply Fears, Copper Slips on Demand

Platinum prices are up 50% year-to-date, driven by ETF inflows, investor demand, and fears of global shortages. Russian giant Nornickel forecasts a platinum deficit of 200,000–300,000 oz over 2025–26. Meanwhile, copper prices dipped below $10,000/ton as demand cooled and stockpiles rose modestly, ending a rally that had been fuelled by tariff-driven hoarding.

Markets Brace for US Tariff Details

President Trump’s tariff strategy remains a wildcard, with trading partners awaiting notification of new rates. The July 9 deadline looms, and Trump’s latest comments suggest most countries will face unilateral levies. This could reignite market volatility and weigh further on the USD.