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Money Market FundsGlobal markets opened the week with extreme volatility as renewed developments in the Middle East drove sharp swings across currencies, commodities and interest-rate expectations. Early risk aversion followed comments suggesting further escalation in the conflict, including threats around the Strait of Hormuz and attacks on civilian-linked infrastructure. Markets reacted immediately, with oil prices jumping, gold rebounding and the rand weakening sharply before reversing course later in the morning.
Sentiment shifted again after comments from US President Donald Trump indicated a five-day pause in further escalation to allow space for talks. That announcement quickly calmed some of the earlier panic, leading to a pullback in oil and a recovery in risk-sensitive assets. The speed of the turnaround underlined how headline-driven markets have become, with large moves taking place in a matter of minutes as traders responded to changing signals from political leaders.
According to TreasuryONE’s André Cilliers, the central issue is no longer trying to predict the next development, but understanding the economic consequences of ongoing instability. Higher oil prices feed directly into inflation, company costs and consumer spending, while sudden reversals complicate decision-making for businesses and investors. In this environment, he argued that the priority should be practical risk management rather than short-term market speculation.
In South Africa, attention is also turning to the Monetary Policy Committee meeting this week. Despite relatively low current inflation, TreasuryONE expects the South African Reserve Bank to remain cautious and keep rates unchanged, given the uncertainty created by global events. The rand, which briefly traded above 17.20 before recovering toward 16.75, is expected to remain volatile and headline-sensitive, with broad trading ranges likely to persist until there is clearer evidence that tensions have genuinely eased.