Hedging
Liquidity Solutions
Cash Flow Forecasting
Corporate Treasury Outsourcing
Treasury Tecnology
Connectivity
Supply Chain Finance
SME Forex
Money Market FundsGlobal tensions escalated sharply over the weekend following a joint military operation by Israel and the United States targeting senior Iranian leadership. Reports indicate that 48 individuals were killed during the strike, including Iran’s Supreme Leader. Iran responded with retaliatory attacks on US-aligned military bases across the region, as well as direct strikes involving Israel and Hezbollah, intensifying fears of a broader regional conflict.
The unfolding situation has significantly raised geopolitical risk, particularly given the strategic importance of the Strait of Hormuz. Roughly 20% of the world’s oil supply passes through the narrow 33-kilometre waterway. While Iran maintains that the strait remains open, insurance providers have reportedly withdrawn war-risk cover for vessels operating in the region, causing more than 150 oil tankers to anchor offshore. Oil prices have already surged close to 10%, approaching $80 per barrel, with broader energy markets also affected.
Rising energy prices present a material inflation risk globally. For the United States, higher oil prices complicate the Federal Reserve’s policy outlook, particularly as President Trump has continued to advocate for lower interest rates. While upcoming US non-farm payroll data is expected to show slower job creation compared to the previous month, the inflationary implications of energy shocks may limit the Fed’s room to cut rates in the near term. Markets now face the prospect of stagflationary pressures if inflation accelerates while employment growth moderates.
Locally, the rand experienced initial risk-off weakness, briefly moving above R16.20 before stabilising near R16.08. Despite heightened volatility, supportive commodity prices, relatively high domestic interest rates and a stable fiscal backdrop continue to underpin the currency. For now, the rand is expected to trade within a R15.80 to R16.30 range, although developments in the Middle East remain the primary risk factor for global markets in the week ahead.