Global Market Volatility Rises Amid Tariff Threats and Data Doubts

Trump Targets Russian Energy Buyers

President Donald Trump escalated global trade tensions by announcing steep tariffs on countries purchasing Russian energy—most notably India. This aggressive move comes alongside a more conciliatory stance towards China, where Trump hinted at a possible extension of the current trade truce.

While the trade deficit with China has narrowed to a 21-year low, signs of economic weakness are emerging. Services PMI figures underperformed, and questions over the integrity of US economic data have deepened following Trump’s controversial dismissal of BLS head Erika McEntarfer.

ANC Criticises SARB Over Inflation Target Shift

The ANC has expressed frustration with SARB Governor Lesetja Kganyago’s unilateral move to lower the Bank’s inflation preference to 3%—still within the 3-6% band. President Ramaphosa suggested the shift bypassed proper Cabinet consultation, raising constitutional questions.

ETM argues the criticism is ideologically driven and economically flawed. Lower inflation helps stabilise real expenditure and supports GDP growth, while the real economic drag stems from maladministration and fiscal misalignment rather than monetary policy decisions.

Rand Finds Relief as Dollar Loses Steam

Amid political and economic crosswinds in the US, the USD is weakening, giving room for ZAR to recover ground. The rand traded below 17.90/USD, showing resilience despite domestic tensions.

Investor sentiment has shifted as speculation of multiple Fed rate cuts grows stronger, with a Reuters poll revealing increased bearish bets against the dollar. Lower US yields and easing inflation expectations have supported gold and commodities, bolstering ZAR’s terms of trade.

Weak Bond Auction Signals Investor Caution

SAGB demand slipped at the latest vanilla auction, with the bid cover ratio falling sharply to 2.62x. Bonds with typically high demand, such as the R2033 and R2038, underperformed, raising concerns about overstretched valuations.

Despite this, secondary market yields remain at three-month lows, reflecting broader investor confidence. SARB’s 3% inflation preference could anchor longer-term expectations, but political pushback may complicate forward guidance.

Commodities in Focus: Oil, Corn, and Copper

Oil Slides Despite Tariff Rhetoric

Brent and WTI oil prices extended their decline as oversupply concerns grow. OPEC+ is set to increase output in September, while markets have largely dismissed Trump’s tariff threats as posturing—unless matched with action.

Corn Falls on Surplus Fears

US corn futures hit a one-month low as crop estimates exceeded USDA forecasts. With 73% of the crop in excellent condition, fears of a glut are rising.

Copper Faces Supply Shock

Codelco’s El Teniente mine in Chile halted production following a fatal tunnel collapse. The shutdown could slash output by 30,000 metric tons/month, potentially tightening global copper supply as stockpiles dwindle.

Gold Shines Amid US Economic Uncertainty

Gold prices hovered near $3,383/oz, extending their rally on expectations of a Fed rate cut in September. Investors are turning to bullion as a hedge against dollar weakness, global trade instability, and potential stagflation in the US.

Trump’s Trade Strategy Redefined

President Trump intensified trade realignment efforts with tariff threats on pharma and semiconductors and is eyeing a replacement for outgoing Fed Governor Kugler. Among the candidates are Kevin Warsh and Kevin Hassett, both seen as allies in Trump’s push for rate cuts. His decision could shape Fed policy heading into 2026.