Download Weekly Note - 19 January 2026
Local Market Update:
South African markets reflected a mix of improving fundamentals and lingering political risk. Eskom struck a more constructive tone heading into 2026, citing tangible gains from its Generation Recovery Plan, while the US House’s approval of a three-year AGOA extension improved trade visibility for exporters. South Africa’s removal from the EU’s high-risk jurisdictions list further eased compliance concerns. Offsetting this, Mr Price hit a new 52-week low amid acquisition uncertainty, and British American Tobacco announced the closure of its local plant. Bond sentiment remained fragile amid geopolitical tensions.
European Market Update:
European sentiment was mixed but broadly resilient. UK business confidence weakened further, with the ICAEW index remaining firmly negative, although housing expectations and easing financing conditions provided some support. France posted modest fourth-quarter growth, while Germany returned to expansion in 2025 for the first time in three years, underpinning regional optimism. Progress towards a Swiss–US trade agreement helped offset geopolitical risks. Political uncertainty persisted in France after the prime minister unveiled revised 2026 budget proposals, highlighting ongoing fiscal and parliamentary challenges despite tentative economic stabilisation.
US Market Update:
US markets stabilised after early weakness as focus shifted to the start of earnings season. Financial stocks came under pressure following President Trump’s proposal to cap credit-card interest rates, with bank executives warning of margin compression and tighter credit availability. Markets continued to price a steady Federal Reserve stance in the near term, with rate cuts expected later in the year. Against this backdrop, Goldman Sachs and Morgan Stanley rallied on strong results, while TSMC delivered record earnings and reinforced confidence in AI-driven semiconductor demand. Trading remained cautious ahead of options expiry.
Asia Market Update:
Asian markets were shaped by trade dynamics and central-bank caution. China reported a record 2025 trade surplus, underscoring export resilience despite renewed US tariff pressure, as firms increasingly redirected shipments towards emerging markets. Japanese manufacturer confidence slipped to a six-month low, while wholesale inflation eased on lower fuel costs, though yen weakness continues to pose upside risks. The Bank of Korea held rates at 2.50%, citing currency constraints. Elsewhere, India’s trade data highlighted shifting export flows, reflecting diversification efforts amid rising US tariffs.
Currency Market Update:
Currency markets reflected a more defensive global tone. The South African rand strengthened for an eighth consecutive week against the dollar, supported by improved sentiment, although investors remained cautious ahead of this week’s inflation release for clearer signals on domestic momentum and monetary policy. The US dollar weakened as risk appetite deteriorated following renewed tariff threats from President Trump towards several European economies. Heightened uncertainty lifted demand for traditional safe-haven currencies, notably the yen and Swiss franc, reinforcing a broader risk-off bias across global FX markets.
Commodity Market Update:
Commodity markets were dominated by geopolitical risk and shifting monetary expectations. Oil prices edged higher as escalating tensions around Iran increased the risk of supply disruptions from a key OPEC producer, adding a geopolitical premium to crude markets. These concerns outweighed expectations that additional supply could emerge from Venezuela following political developments in Caracas. Precious metals strengthened further, with gold reaching fresh record highs and silver extending gains, as benign US inflation data reinforced expectations for eventual Federal Reserve rate cuts and sustained safe-haven demand.