Hedging
Liquidity Solutions
Cash Flow Forecasting
Corporate Treasury Outsourcing
Treasury Technology
Connectivity
Supply Chain Finance
SME Forex
Money Market FundsGlobal markets remain dominated by developments in the Middle East, with oil prices moving back above $100 a barrel as hopes of a durable agreement between the United States and Iran faded over the weekend. According to TreasuryONE’s weekly market update, the conflict continues to hold the world economy hostage, with the Strait of Hormuz remaining the key pressure point for energy markets. While the gap between spot and future oil prices has narrowed for now, that balance could shift quickly if supply constraints deepen and tanker flows remain disrupted.
The risk for markets is that any renewed oil shortage would feed directly into global inflation and weaker economic growth. TreasuryONE noted that higher energy costs reduce consumer spending power and raise inflationary pressure at the same time, creating a difficult backdrop for policymakers. In the United States, inflation is expected to tick up to around 3.7%, but the Federal Reserve is still expected to hold rates steady at its next meeting while monitoring whether the oil shock proves temporary or more persistent.
In South Africa, the rand remains under pressure from both external and domestic factors. Rising oil prices and the prospect of higher global rates continue to weigh on sentiment, while local political developments have added another layer of uncertainty. TreasuryONE highlighted the Constitutional Court ruling related to President Cyril Ramaphosa, and his subsequent decision not to resign, as a fresh source of concern for markets, contributing to the rand’s softer tone.
For now, TreasuryONE expects the rand to remain range-bound between R16.25 and R16.75. A sustained move stronger than R16.25 would likely require a meaningful de-escalation in the Middle East and a reopening of free shipping through the Strait of Hormuz. Conversely, any further escalation could push the currency weaker. Until there is more clarity, oil prices, inflation expectations and geopolitical headlines are expected to remain the main drivers of market direction.