Last week, disputes over the Strait of Hormuz persisted, with little tangible progress toward resolution. As a result, oil prices climbed back above $100 per barrel. Locally, South Africa’s annual inflation rate edged up to 3.1% in March from 3% in February.
Globally, challenges to the ceasefire in the Middle East conflict signalled the potential for further escalation, while locally, the March CPI is due this week with risks to the upside following the effect of the surge in oil prices.
Over the weekend, geopolitical tensions in the Middle East intensified following the collapse of US-Iran ceasefire negotiations in Pakistan. Washington attributed the breakdown to Iran’s unwillingness to commit to dismantling its nuclear weapons programme, while Tehran maintained that the US must first demonstrate trustworthiness. The development has already placed renewed upward pressure on global oil prices, with expectations of disruptions to crude supplies heading to China.
Last week, Donald Trump issued a Strait of Hormuz ultimatum amid fragile ceasefire talks. Locally, President Cyril Ramaphosa reaffirmed South Africa’s position as a leading destination for foreign direct investment ahead of this week’s sixth South Africa Investment Conference (SAIC).
Globally, conflict in the Middle East marked further escalation, while locally, the SARB governor noted that risks to the inflation outlook are assessed to be to the upside.
Geopolitical tensions continue to escalate this week as the US issued a 48-hour ultimatum demanding Iran reopen the Strait of Hormuz, with Treasury Secretary Scott Bessent stating President Trump is prepared to “take whatever steps it takes” to achieve US objectives, including neutralising Iran’s air force and navy. Iran warned of retaliation targeting regional energy, desalination, and IT infrastructure. Markets responded with risk-off flows amid fears of a prolonged energy shock. Central banks globally held rates steady while highlighting upside inflation risks. Locally, February CPI surprised lower at 3.0% y/y, but the Iran conflict is set to trigger sharp fuel-price hikes and force the SARB into wait-and-see mode.
Last week, escalation in the Middle East continued to drive market volatility with no credible peace deal in sight. Locally, financial markets were not spared from the global risk-off wave, as escalating tensions in the Middle East spilled over into domestic assets, triggering a broad-based sell-off across equities and bonds.
Globally, conflict in the Middle East shows no signs of easing following US and Israeli strikes on Iran, while locally, South Africa may see a big fuel price hike in early April as the ongoing conflict pushes oil prices higher.
Geopolitical tensions continue to escalate this week as President Donald Trump reaffirmed the US commitment to a sustained military campaign against Iran, outlining four strategic objectives to neutralise its missile arsenal, navy, nuclear ambitions, and proxy networks. Markets responded with risk-off flows, pushing safe-haven assets higher amid fears of prolonged conflict and energy supply disruptions. Locally, Budget 2026 reinforced South Africa’s fiscal consolidation path.
Prowess Head of Fixed Income, Qhivi Tiva, reflects on the 2026 budget and strikes a note of cautious optimism as he summarises the key announcements made by Minister of Finance Enoch Godongwana.
