Hedging
Liquidity Solutions
Cash Flow Forecasting
Corporate Treasury Outsourcing
Treasury Tecnology
Connectivity
Supply Chain Finance
SME Forex
Money Market FundsFresh U.S. labour market data released this week has reinforced expectations of a softer economic trajectory heading into year-end, following the longest government shutdown in modern history. The delayed non-farm payroll figures for October and November showed a sharp contraction in October—the largest drop in five years—largely attributed to the shutdown’s impact on public-sector hiring. While November recorded a partial rebound, the headline figure that caught markets’ attention was unemployment rising to 4.6%, its highest level in four years.
TreasuryONE Currency Strategist André Cilliers noted that the Federal Reserve’s recent 25-basis-point rate cut came as no surprise given the labour data now coming to light. The Fed’s policy mandate remains focused on two key pillars: inflation and employment. With job creation slowing and unemployment trending higher, monetary easing was increasingly warranted. However, Sviat cautioned that the apparent November rebound may still be revised, highlighting the importance of upcoming data revisions before drawing firm conclusions.
Attention now turns to U.S. inflation data, which remains stubbornly above the Federal Reserve’s 2% target, hovering closer to 3%. While labour market weakness supports the case for further rate cuts, sticky inflation continues to complicate the outlook. Should inflation show signs of cooling alongside softer demand and manufacturing activity, markets may begin to price in additional easing beyond the two cuts currently expected next year. Conversely, persistently elevated inflation could prompt a more cautious stance from Fed Chair Jerome Powell.
In South Africa, the rand continues to benefit from a softer dollar, supportive commodity prices and sharply lower oil prices—now at five-year lows—helping contain domestic inflation pressures. With USD/ZAR trading around 16.75, TreasuryONE expects the currency to remain within a 16.75–17.25 range through December. While thinner liquidity during the festive period may introduce bouts of volatility, the broader outlook points to a relatively stable end to the year, provided global conditions remain unchanged.