Download Weekly Note - 05 January 2026
Local Market Update:
Investor sentiment in South Africa was moderately constructive as local equities edged higher in subdued holiday trading. Focus remains directed towards structural reforms in logistics and electricity supply, which continue to shape the macro outlook into 2026. Aspen Pharmacare confirmed the disposal of its major Asia-Pacific assets, excluding China, to BGH Capital for A$2.37 billion to reinforce its balance sheet. Although seasonal factors kept activity muted, investors also began positioning ahead of the forthcoming domestic corporate reporting season.
European Market Update:
Across Europe, equity markets entered 2026 at record highs, supported by gains in technology and defence counters. The STOXX 600 advanced 0.7% to 596.14, moving closer to the 600-point mark and extending strong 2025 performance. Notably, the FTSE 100 broke through 10,000 points for the first time, underpinned by easing rate expectations and German fiscal stimulus. However, renewed contraction in eurozone manufacturing highlights persistent industrial softness despite improving investor appetite for rotation away from stretched US mega-cap valuations.
US Market Update:
In the United States, equity markets regained positive momentum as the Dow Jones and S&P 500 ended higher, snapping a four-day losing streak driven by semiconductor and aerospace strength. All major indices delivered double-digit gains in 2025, extending a multi-year winning run. Attention now shifts to labour-market data and the Federal Reserve policy outlook, with Chair Powell signalling caution on the pace of any further rate reductions. Trade policy developments under President Trump continue to represent an additional source of uncertainty.
Asia Market Update:
Momentum in Asia-Pacific markets improved at the start of the first full trading week of 2026, despite elevated geopolitical tensions following US military action in Venezuela. Bank of Japan commentary suggesting that further policy tightening remains possible if inflation trends persist helped shape market tone. Japan’s moderate recovery trajectory continued, even with tariff headwinds. Meanwhile, Chinese services-sector activity softened, with the RatingDog Services PMI easing to 52.0 as new-order growth slowed and export demand slipped back into contraction.
Currency Market Update:
Foreign-exchange markets began the year with the rand trading steadily in thin liquidity conditions, as investors monitored domestic fundamentals such as inflation trends, fiscal consolidation and commodity-price dynamics. By contrast, the US dollar firmed into the first full trading week of 2026, advancing to multi-week highs against the euro and yen ahead of key US macroeconomic releases and Federal Reserve guidance. Geopolitical developments had limited direct impact, with traders largely focused on underlying economic signals.
Commodity Market Update:
Commodity markets reflected a cautious tone, with oil prices edging higher as investors evaluated potential supply risks linked to political upheaval in Venezuela. Reports confirming that PDVSA operations were largely unaffected supported expectations of a still well-supplied crude market. At the same time, gold extended gains on safe-haven demand as geopolitical risk premia increased, with other precious metals broadly firmer. Market participants continue to balance these developments against softer global demand indicators and evolving macro-policy conditions.