Weekly market brief - 5 March 2026

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* Will the SARB pause rate cuts?
* Rand in the line of fire
* A world of change
* Traffic in the crucial Strait of Hormuz slows down
* U.S. and Iran spike volatility in the market
* EU CPI higher-than-expected

Currency Outlook

  • “The rand is trading around R16.58/USD. Although the USD paused its rally and eased from over three-month highs to 98.82 on a trade-weighted basis, upbeat American services-sector figures, which reached a more than three-and-a-half-year peak in February, have helped sustain its safe-haven appeal amid volatility. The local unit has clawed back some ground against the majors on Wednesday, moving back below the R16.40/USD level with firm gold prices providing support. Persistently high oil prices, however, continue to pressure South Africa's terms of trade, leaving the currency exposed. The local unit pair broke out of its recent trading range, surpassing the prior high at R16.4260/USD to set a fresh peak at R16.7560/USD. This level is now likely to provide resistance on the topside, although a topside breach could see the pair targeting R16.90/USD next should Middle East tensions escalate further and risk appetite craters. Support on the downside sits around R16.31/USD, and the rand will likely trade precariously amid Middle East developments, which remain the dominant influence on risk appetite.” (Source: Investec Morning Commentary dated 05.03.2026)
  • With U.S. nonfarm payrolls figure due to be released ON Friday, it will be interesting to see where the rand closes the week. Unfortunately, the local unit is dependent on news headlines and will move in either direction.

Local Data

  • Private sector credit extension (PSCE) growth accelerated to 8.8% y/y in January from 8.7% y/y in December.
  • The trade surplus shrunk to R9bn in January (from R22bn in December) but remains significantly better than the R17bn deficit a year earlier (January 2025).
  • The manufacturing PMI decreased in February, to 47.4, from 48.7 in January.
  • Naamsa vehicle sales increased by 11.4% y/y in February, after increasing by 7.5% y/y in January.
  • The S&P Global industry-wide PMI remained stable at 50.0 in February.
  • The BER's business confidence index rose by three points to 47 in Q1:26, from 44 in Q4:25.
  • Electricity generation (production) decreased by 6.2% y/y in January 2026. Seasonally adjusted electricity generation increased by 1.5% in January 2026 compared with December 2025, following m/m changes of -1.4% in December 2025 and -1.3% in November 2025.

Interest Rate Outlook

  • South Africa’s interest rate outlook has become increasingly uncertain as escalating conflict in the Middle East drives volatility in oil prices, the rand and global financial markets, raising fresh questions about whether the South African Reserve Bank (SARB) will proceed with further rate cuts this year.
  • The next MPC meeting is scheduled for the 26th of March 2026.

International News

  • US
    • Jobless claims came in below expectations at 213,000 this week, from 213,000 last week.
    • U.S. PPI inflation came in higher-than-expected in January.
    • The U.S. ISM manufacturing activity remained in expansion in February.
  • Euro zone
    • Eurozone CPI for February came in higher-than-expected, at 1.9% y/y, up from 1.7% y/y in January.
    • The ECB warned that a prolonged escalation of the Middle East war involving Iran would pose a significant risk to the Eurozone outlook by driving energy prices higher.
    • In the Eurozone, January retail sales data came in at 2.0% y/y growth, from a revised 1.8% y/y in December.
  • United Kingdom
    • UK Nationwide house prices rose 0.3% m/m in February, slightly above expectations, matching January's increase.
    • This brought the average house price to £273,176, while annual growth came in at 1.0% in February, also matching January's increase.
  • China
    • China’s new home prices fell at the fastest pace in more than three years in February, a private survey showed on Sunday.
    • According to official data from the National Bureau of Statistics (NBS), the February manufacturing PMI fell to 49.0 from 49.3 in January, a four-month low.
    • China on Thursday set out a five-year roadmap to turbocharge scientific breakthroughs and embed AI across its industrial economic machine, framing technological dominance as a core national security goal in its sharpening rivalry with the United States.
  • Australia
    • Job ads rose for a second month in February to the highest level in 16 months, private sector data showed on Monday.
    • The RBA raised interest rates by 25 basis points to 3.85% last month.
  • Japan
    • The S&P Global Japan Manufacturing Purchasing Managers’ Index (PMI) rose to 53.0 in February, from 51.5 in January.
    • Bank of Japan Governor Kazuo Ueda on Wednesday said the Central Bank will continue to raise interest rates if its economic forecasts materialise but warned of the potential hit to economic growth from the Middle East conflict that required vigilance.

Precious Metals

  • Gold experienced a volatile week, swinging from sharp rallies that pushed prices to a high of USD 5,418/oz to steep pullbacks down to a low USD 4,995/oz, as geopolitical tensions and shifting U.S. interest rate expectations continued to dominate market sentiment.
  • According to the CME Group’s FedWatch tool, investors widely expect the U.S. Federal Reserve to keep interest rates unchanged at the conclusion of its upcoming two-day meeting on March 18.

Base Metals

  • Copper traded lower for most of the week as a stronger U.S. dollar, heightened geopolitical tensions, and rising energy prices weighed on sentiment, driving prices down to an intraweek low of USD 12,722/t.
  • Analysts at Citi cautioned that escalating conflict in the Middle East poses downside risks for copper, warning that prices could fall below USD 12,000/t in the near term. They noted that ongoing disruptions, particularly drone threats to shipping routes and energy infrastructure may continue to weigh on the macroeconomic environment and industrial metals sentiment.

Oil

  • Oil prices posted strong gains through most of the week as escalating U.S. and Israeli military strikes against Iran intensified regional instability, shut down key energy infrastructure, and disrupted shipping through the critical Strait of Hormuz.
  • According to the EIA, US crude inventories increased by 3.475 million barrels to 439.3 million for the week ending February 27, exceeding forecast of a 2.3-million-barrel rise.