Download Weekly Note - 26 January 2026
Local Market Update:
South African macro conditions remained supportive, with SARB Governor Lesetja Kganyago reaffirming that inflation is converging towards the revised 3% target in 2026, leaving scope for a further 50 basis points of rate cuts. December headline inflation rose modestly to 3.6% year on year, in line with expectations, while retail sales growth remained resilient. Corporate focus included Nedbank’s proposed acquisition of a majority stake in Kenya’s NCBA Group and Nissan Motor’s planned disposal of its Rosslyn plant to Chery Automobile, reflecting restructuring and regional expansion themes.
European Market Update:
European sentiment softened after Citigroup downgraded continental Europe to neutral, citing rising transatlantic tensions. UK data were mixed, with inflation surprising modestly on the upside and price expectations rising to near three-year highs, underscoring persistent cost pressures. Euro zone consumer confidence showed tentative improvement, suggesting early stabilisation despite political and fiscal uncertainty. On the corporate front, Ericsson rallied after a strong earnings beat and buyback announcement, while Adidas and Puma weakened following broker downgrades.
US Market Update:
US markets experienced heightened volatility, with sharp declines early in the week triggered by renewed tariff threats from President Donald Trump, followed by a strong rebound as risk appetite stabilised. Airline stocks outperformed on upbeat guidance, while Netflix lagged after cautious outlook commentary and a pause in buybacks. Underlying fundamentals remain constructive, with solid consumer spending and a resilient labour market. Investor attention is shifting to a pivotal earnings week, where results from mega-cap technology companies are expected to exert outsized influence on index direction.
Asia Market Update:
Asian macro signals were mixed. China left benchmark lending rates unchanged for an eighth month, reinforcing a cautious policy stance amid uneven growth, while issuing ultra-long bonds to support equipment upgrades and investment. South Korea’s economy contracted unexpectedly in the fourth quarter, reflecting weak domestic demand despite resilient exports, though AI-driven trade should support stability. In contrast, Australia’s labour market surprised positively, lifting rate-hike expectations. The Bank of Japan held rates steady but upgraded growth forecasts, pointing to a strengthening wage–price cycle and gradual policy normalisation.
Currency Market Update:
The South African rand traded near three-year highs against the US dollar as easing global risk aversion reduced demand for safe havens. The dollar weakened broadly, tracking its steepest weekly decline in a year amid policy uncertainty and softer geopolitical rhetoric. The Japanese yen remained rangebound following the Bank of Japan’s decision to hold rates while lifting growth and inflation forecasts, signalling a cautious tightening bias. Currency markets remain highly sensitive to policy signals, with intervention risks still present should volatility re-emerge.
Commodity Market Update:
Commodity markets were shaped by geopolitical risk and policy expectations. Oil prices rebounded on renewed US warnings toward Iran, reviving supply concerns, although gains were capped by larger-than-expected US inventory builds. Precious metals extended their rally, with gold reaching record highs alongside strength in silver and platinum, supported by geopolitical uncertainty, a weaker dollar and expectations of US rate cuts. In South Africa, proposed changes to sugar reference pricing highlighted rising trade tensions, underscoring the growing role of policy intervention and protectionism across select commodity-linked industries.