In this week’s market update from TreasuryONE and ETM Analytics, Head of Market Risk, Wichard Cilliers, discusses key developments driving global and domestic sentiment.
The U.S. Senate is under pressure to pass a significant $4.5 trillion tax cut and $1.2 trillion spending cut package before the 4 July deadline. Meanwhile, Federal Reserve Chair Jerome Powell is expected to speak at the ECB’s Sintra Summit on Tuesday, with markets watching closely for any signals on interest rate direction. Although Powell is likely to reiterate a cautious, data-driven approach, labour market softness and declining growth expectations could start shifting policy discussions.
U.S. economic indicators this week include JOLTS, job data, and non-farm payrolls, with expectations for a slight uptick in unemployment to 4.3%. While geopolitical risks have taken a back seat for now, trade tensions remain relevant, particularly after comments from Donald Trump on future tariffs and a potential new minerals-focused trade deal with China.
Domestically, political tension within the GNU remains a background risk. Despite internal friction—most recently from the DA—the market has largely priced in the noise, awaiting real action. As a result, the rand remains steady, buoyed by a weaker dollar rather than local fundamentals.
The currency is currently trading in the 17.60 to 18.20 range, with no major breakouts expected unless an external shock occurs. Analysts will continue to monitor this week’s U.S. data for direction. With U.S. markets closed Friday for Independence Day, most volatility is expected before Thursday.
Stay tuned for continued updates on both local and international market shifts.