US Payrolls Take Centre Stage

Today’s US employment report is the key market event, with payroll growth expected to come in at around 80,000 while the unemployment rate is forecast to remain steady at 4.2%. A stronger-than-expected outcome would reinforce expectations that the Federal Reserve may still consider another interest rate increase, while a weaker result could revive expectations for policy easing later this year. Markets will also pay close attention to revisions to previous months’ employment figures.

Earlier labour market data remained broadly supportive, with initial jobless claims rising only modestly to 199,000, indicating that companies continue to retain workers despite slower hiring activity. Meanwhile, US productivity growth exceeded expectations, helping to keep labour cost pressures contained and reducing concerns over inflation.

China’s Trade Performance Remains Strong

China surprised on the upside with exports rising 23.9% year-on-year in July, while imports increased 27.5%, supported by continued demand for high-tech products. The figures reinforce the view that external demand remains China’s primary growth driver, even as domestic consumption continues to lag. The strong trade performance may also increase trade tensions with both the United States and Europe as China’s trade surplus remains elevated.

Markets will now look ahead to China’s inflation data over the weekend, where softer price pressures are expected to reinforce concerns around weak domestic demand and industrial overcapacity.

Rand Finds Support from Gold

The rand continues to receive support from the recent rally in gold prices despite renewed geopolitical uncertainty and firmer oil prices. Increased central bank demand for gold, particularly from China, has helped strengthen South Africa’s terms of trade and has contributed to the rand’s resilience.

However, uncertainty surrounding today’s US payrolls report and the approaching South African long weekend are expected to keep traders cautious.

Fixed Income Markets Await US Data

Bond markets are expected to remain driven by today’s US employment figures. A stronger labour market report would likely push US Treasury yields higher, strengthen the US dollar and place pressure on emerging market assets, while a weaker outcome could support bonds, equities and emerging market currencies, including the rand.

Locally, South Africa’s inflation-linked bond auction may see subdued demand as investors remain cautious ahead of both the payrolls release and the long weekend. FRA pricing continues to imply expectations of only one additional SARB rate hike over the coming months.

Oil Prices Rise on Renewed Middle East Tensions

Oil prices extended their recent gains as geopolitical tensions around the Strait of Hormuz intensified. Reports that Iran struck targets near the strategic waterway, alongside proposals to restrict access for US- and Israeli-linked vessels, have increased concerns over potential disruptions to global energy supplies. Brent crude climbed above $83 per barrel, while WTI approached $78 per barrel.

Although negotiations continue, significant differences remain between the United States and Iran regarding future control of shipping through the Strait, keeping energy markets on edge.

Commodity Markets

China continues to expand its gold reserve strategy, with its central bank reportedly increasing holdings in Hong Kong as part of broader efforts to strengthen its influence in global bullion markets. Continued official sector buying has helped keep gold prices comfortably above $4,000 per ounce.

Copper prices also remain well supported as tightening global supplies, strong demand linked to data centres and the energy transition, and concerns over potential US import tariffs continue to underpin industrial metals.

Chart of the Day

Today’s chart highlights the sharp recovery in emerging market FX carry trade returns, which have climbed to their highest levels in more than seven years. This reflects investors’ renewed appetite for higher-yielding emerging market currencies despite ongoing geopolitical uncertainty and elevated global interest rates.

Bottom Line

Markets are entering a pivotal session with today’s US employment report expected to determine the near-term direction for global interest rates, the US dollar and emerging market assets. While the rand continues to benefit from higher gold prices and resilient terms of trade, renewed tensions in the Middle East and firmer oil prices remain important risks that could quickly shift market sentiment.

Daily Market Report – 7 Aug 2026