Download Weekly Note - 02 February 2026
Local Market Update:
South Africa’s fiscal outlook improved after National Treasury signalled debt stabilisation relative to GDP and a third straight primary surplus, helping lower bond yields and support the rand. Progress towards a formal fiscal anchor and continued consolidation reinforced a recent ratings upgrade and improved sovereign risk perceptions. Structural reforms advanced under Phase 3 of the government–business agenda, focusing on youth employment, crime and energy and logistics efficiency. The South African Reserve Bank held rates at 6.75%. Diplomatic tensions with Israel added geopolitical uncertainty.
European Market Update:
European markets reflected a mixed macro and corporate backdrop. Puma rose after selling a strategic stake to Anta Sports, while Adidas announced a €1 billion share buyback on strong sales momentum. Spain’s unemployment fell to its lowest since 2008, signalling gradual improvement, but Germany cut growth forecasts amid trade uncertainty. UK housing activity strengthened as mortgage rates eased, though business confidence softened. German inflation surprised at 2.1% and French car registrations declined, underscoring uneven regional demand and policy traction.
US Market Update:
US markets navigated steady policy and leadership uncertainty. The Federal Reserve held rates at 3.5%–3.75%, citing persistent inflation alongside resilient growth and a stabilising labour market. Investors assessed the nomination of Kevin Warsh as potential Fed chair, viewed as a comparatively hawkish signal. Equity performance diverged: Microsoft weakened on cloud and AI monetisation concerns, while Apple traded volatile after results. Shutdown risks and rate uncertainty kept sentiment cautious.
Asia Market Update:
Asian markets reflected stabilising but uneven momentum. China returned to industrial profit growth as authorities curbed price competition and supported margins, while export resilience offset weak domestic demand and lingering deflationary pressures. Australian inflation accelerated in the fourth quarter, tempering expectations for near-term rate cuts despite moderation in some components. In Japan, Tokyo inflation slowed to 2.0% on fuel subsidies and softer food prices, though underlying trends remained firm. Chinese semiconductor firms pursued major Hong Kong listings, highlighting sustained capital-raising tied to domestic technology self-sufficiency goals.
Currency Market Update:
Currency markets were driven primarily by shifting policy expectations. The South African rand weakened after the South African Reserve Bank left rates unchanged, while the US dollar firmed as investors considered the implications of Kevin Warsh potentially leading the Federal Reserve. Expectations of tighter balance-sheet policy supported the dollar. The yen also drew focus after domestic political commentary signalled tolerance for currency softness. Moves largely reflected rate outlooks rather than new macroeconomic data.
Commodity Market Update:
Oil recorded one of its strongest monthly advances in years as heightened Middle East tensions increased perceived risks to Iranian supply. Additional disruptions in Kazakhstan, Russia and Venezuela, alongside weather-related US production losses, tightened near-term balances. Although some output is returning and sanctions relief could aid Venezuelan volumes longer term, geopolitics remains the dominant driver. Gold prices were volatile, retreating at times as markets speculated on future Federal Reserve leadership and the implications for US rate expectations.