In this exclusive webinar, ETM Analytics and TreasuryONE break down the market landscape following U.S. President Donald Trump’s first week back in office. With a flurry of executive orders, strong-handed policies on immigration and trade, and renewed pressure on the Federal Reserve, global markets are adjusting to a new era of volatility.
Key Discussion Points:
🔹 Trump’s Policy Moves & Their Impact on Markets: Trump has wasted no time implementing tariffs as a negotiation tool, exemplified by his standoff with Colombia. His aggressive trade strategy is expected to have far-reaching consequences, especially if similar measures are extended to China and Mexico. The potential for a full-scale trade war remains a major market risk, influencing capital flows and risk appetite.
🔹 Federal Reserve & Interest Rate Outlook: The Fed remains cautious, with inflation still above 3% and a strong U.S. labour market. While rate cuts were expected, recent data suggests the Fed may hold off on aggressive monetary easing. Trump has already pressured Fed Chair Jerome Powell to cut rates, but markets remain skeptical about how much influence the administration will have.
🔹 Emerging Market Volatility & The Rand’s Performance: The South African Rand, once one of the best-performing emerging market currencies, is experiencing high volatility. While short-term stability may return, risks from global uncertainty, U.S. policy shifts, and local economic decisions remain key factors. The upcoming South African Reserve Bank (SARB) meeting is expected to deliver a 25 basis point rate cut, although some analysts believe SARB might hold off for more clarity on global trends.
🔹 Geopolitical Risks & Economic Consequences: Trump’s call for an end to the Ukraine-Russia conflict and his influence on Middle East ceasefires signal a shift in U.S. foreign policy. However, a reduction in military aid could impact America’s defense industry, affecting GDP growth. The South African government’s expropriation bill and the potential loss of AGOA trade benefits add local uncertainty, with markets closely watching investor sentiment and foreign capital flows.
🔹 Stock Market & Liquidity Concerns: The global stock market, fueled by years of aggressive monetary policy and fiscal expansion, faces risks of correction. The webinar highlighted concerns over liquidity tightening, which could expose overvalued assets, especially in tech stocks. China’s recent AI breakthroughs have also shaken confidence in the dominance of U.S. tech firms, with Nvidia and other chipmakers seeing market corrections.
Outlook for the Rand & Market Stability
Market expectations suggest the Rand will trade between 17.80 and 19.00 in the coming months, with potential for improvement depending on South Africa’s upcoming budget and global risk sentiment. As Trump’s policies take shape, the market landscape remains fluid, requiring investors and businesses to stay informed and adapt to new economic realities.
📅 Stay tuned for our Budget Breakdown Webinar in a few weeks’ time, where we will analyse South Africa’s fiscal outlook and its impact on markets.