This week’s market review, hosted by TreasuryONE and ETM Analytics, focuses on renewed trade tensions, U.S. economic data, and local developments impacting the rand.
Despite diplomatic talks between Washington and Beijing remaining active, the ongoing tit-for-tat tariff exchanges are straining relations. The situation reflects the complexity of achieving long-term trade resolutions, with market reactions hinging on every shift in tone or policy.
Turning to U.S. labour data, the market anticipates slightly softer figures in the coming week. According to Andre Cilliers, currency strategist at TreasuryONE, uncertainty in trade policy may be causing businesses to delay expansion or hiring decisions.
Any signs of weakness in employment could place pressure on the Federal Reserve to adjust interest rates. A potential cut would align with President Trump’s ongoing calls for monetary easing and a weaker dollar to boost U.S. exports.
Domestically, South Africa’s upcoming GDP release and the South African Reserve Bank’s quarterly bulletin are not expected to surprise. Cilliers noted that while recent interest rate cuts could support growth in the coming quarter, the current data is likely to reflect continued economic pressure.
The rand, meanwhile, may find support in global volatility and a softening dollar. Although the currency briefly weakened above R18 last Friday, renewed dollar weakness has helped keep the rand in check. Short-term gains are possible, particularly if positive developments continue around the country’s progress on issues like greylisting.
In closing, Cilliers warned that markets remain highly sensitive to trade rhetoric and political developments, especially from the U.S. For South Africa, however, the week ahead is likely to be stable—provided no sudden shocks occur on the international front.