Weekly market brief - 9 July 2026

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* TACO – the market is saying so!!
* Not even Trump could save the USA football team
* Higher oil prices revive inflation concerns
* U.S.-Iran ceasefire deal in jeopardy

Currency Outlook

  • The rand recouped some losses on Thursday afternoon. It jumped to R16.50/USD on Wednesday and then pulled back towards R16.33/USD on Thursday. The local unit weakened after the U.S. and Iran restarted their strikes, with President Donald Trump declaring the truce over. As a result, crude oil prices jumped as investors anticipated more traffic disruptions at the Strait of Hormuz. Indeed, Trump noted that worries in the oil market were one of the reasons why he decided to reach a one-sided deal with Iran. Rising oil prices will make the South African inflation situation worse and push the central bank to intervene. The most recent data showed that the headline CPI jumped 4.5% in May from 3% in February. It has remained above the central bank's target level since March this year. In a statement at the European Central Bank (ECB) forum in Portugal, the head of South Africa's central bank hinted that the bank may be forced to hike interest rates later this year. The bank has already hiked rates to 7% this year, with market participants expecting at least one more. The rand has also struggled because of the ongoing developments in the metals industry.
  • Gold, a key South African export, has plunged to $4,080/oz, down by 27% from its highest point this year. Platinum and palladium prices have also pulled back. Meanwhile, there are signs that the Federal Reserve will hike interest rates this year. Fed minutes released on Wednesday showed that the committee entertained different scenarios in the last meeting. Some members supported a view where the bank started cutting rates later this year, contingent on falling inflation. Others, however, supported hiking rates later, citing the elevated inflation, which has remained above the 2% target for a while. Fed and SARB policies have an impact on the USD/ZAR pair because of the carry trade situation. The rand normally attracts more demand whenever the SARB is hiking rates as that makes it more attractive. Looking ahead, the next main catalyst for the USD/ZAR pair will be the upcoming U.S. inflation report coming out next week.” (Source: LSEG Article dated 09.07.2026)
  • Based on the above, it will be interesting to see where the rand closes the week. Should the rand close below the R16.30/35 region, this could indicate further strength towards R16.20, R16.10 and below.
  • However, if the rand closes above the R16.40 mark, we could see weaker levels of R16.50, R16.60 and above.

Local Data

  • Last week Friday's data showed the S&P Global SA Manufacturing PMI rose to 50.5 in June from 49.6 in May, returning to expansionary territory.
  • South Africa's manufacturing output fell 4.3% year-on-year in May; after ?falling by 2.9% year-on-year in April, statistics agency data showed on Thursday.
  • The IMF downgraded its global growth forecast to 3.0% for 2026, citing geopolitical tensions, higher energy prices and trade fragmentation.

Interest Rate Outlook

  • Market expectations on the interest rate outlook are mixed. Many economists expect the SARB to leave interest rates unchanged in the near term while monitoring inflation risks. Some expect modest rate cuts later in the year.
  • The next MPC meeting is scheduled for the 23rd of July 2026.

International News

  • US
    • The minutes of the U.S. FOMC policy meeting in June showed that policymakers voted unanimously to keep the Fed funds rate unchanged at 3.50%-3.75%.
    • The U.S. ISM services PMI was in line with expectations in June, slipping to 54.0, from 54.5 in May.
    • Jobless claims came in below expectations at 215,000 last week, from 217,000 the previous week.
    • The U.S. trade deficit widened less-than-expected in May, albeit still significantly, to $77.6 billion, from a revised deficit of $54.6 billion in April.
  • Euro zone
    • Eurozone retail sales registered in line with expectations in May, increasing by 1.6% y/y, up from a downwardly revised increase of 0.9% y/y increase in April.
    • Eurozone Sentix investor confidence index improved more-than-expected in July, to -3.1, marking its third consecutive monthly increase, from -13.4 in June.
  • United Kingdom
    • The BOE's Financial Stability Report, highlighted that the UK financial system remains resilient and capable of supporting households and businesses.
    • The UK Decision Maker Panel (DMP) survey noted that three-month ahead inflation expectations came in higher at 4.1% in June, from 4.0% in May.
  • China
    • China's consumer inflation eased to 1.0% y/y in June from 1.2% previously, missing market expectations and suggesting that domestic demand remains subdued.
    • Core CPI also undershot expectations in June, increasing by 1.0% y/y, down from 1.1% y/y in May.
  • Australia
    • In a conference on Wednesday, Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter said global events such as geopolitical tensions, trade disruptions and climate-related events are making inflation more difficult for central banks to manage.
  • Japan
    • Average cash earnings showed average nominal wages rose 3.2% y/y in May, slowing from April's revised 3.6% and slightly missing market expectations, indicating that wage growth remains positive but is losing some momentum.
    • Japan's leading index increased to 116.8 in May, the highest since 2021, from 116.1 in April, just below an expected 116.9.
    • The Japanese yen extended losses this week after some relief last week, down about 0.65%, hovering near a four-decade low at 162.4 against the U.S. dollar.

Precious Metals

  • Gold opened the week at USD 4,172.71/oz and advanced to a near two-week high of USD 4,202.13/oz during early trading. However, the metal later surrendered its gains to close lower at USD 4,163.98/oz, pressured by a stronger U.S. dollar. Losses were partially capped after softer-than-expected U.S. employment data prompted markets to scale back expectations of a near-term U.S. Federal Reserve interest rate hike.
  • Markets are pricing a 68% chance of an interest rate hike in September and see an 87% chance of an increase in January 2027.

Base Metals

  • The base metal opened the week at USD 13,365.00/t, trading within a range of USD 13,320.00/t to USD 13,458.00/t before closing slightly higher at USD 13,403.50/t, supported by generally positive market sentiment early in the week.
  • On Thursday, copper staged a strong recovery, rallying to a more than two-week high of USD 13,490.00/t before easing slightly to trade around USD 13,466.00/t.
  • The rebound was driven by improving risk appetite as markets largely shrugged off military exchanges involving Iran and the United States in the Gulf region. Additional support came from a weaker U.S. dollar following its recent strength, making dollar-denominated commodities more attractive to investors.

Oil

  • Oil prices remained close to pre-conflict levels at the start of the week, with Brent crude settling at USD 71.99/bbl and WTI crude closing at USD 68.55/bbl, as markets assessed the impact of recent geopolitical developments and supply risks.
  • On Thursday, oil prices eased slightly, with Brent crude hovering around USD 77.50/bbl and WTI crude trading near USD 72.84/bbl. Despite the modest pullback, markets remained focused on developments in the Middle East, particularly the potential impact on oil shipments through the Strait of Hormuz, a critical global energy transit route, as well as ongoing diplomatic efforts aimed at de-escalating tensions and restoring stability in the region.