Author: Prowess Investment Team

Prowess Head of Fixed Income, Qhivi Tiva, looks ahead to the themes we can expect from South Africa’s 2026 budget.

Last week, the U.S. Supreme Court struck down Donald Trump’s “Liberation Day” tariffs. Locally, CPI for January came in slightly higher than expected at 3.5% year-on-year (against expectations for a moderation to 3.4% year-on-year) from 3.6% in December.

Globally, US CPI for January registered lower than expected, while locally, SARS has achieved its highest ever revenue collection and January local CPI is expected to moderate this week.

Last week, global markets remained focused on central bank vigilance against persistent inflation, with the ECB and Fed emphasising the need for restrictive policy stances. Locally, SARS achieved record gross revenue collection of R2.303 trillion for the 2024/25 fiscal year ending March 2025, exceeding revised estimates by R8.8 billion. This week, attention shifts to key data releases, including UK GDP and US labour market updates, amid ongoing concerns over productivity, tariffs, and economic momentum in major regions.

Last week, the Federal Reserve kept interest rates unchanged, in line with our expectations. Locally, the SARB acted in tandem, leaving the repo rate unchanged at 6.75% in a dovish-leaning decision, again in line with expectations.

Globally, US President Trump confirmed that he has decided who will succeed Jerome Powell as Fed Chair, while locally, Moody’s kept its credit rating of South Africa unchanged.

Last week, the World Bank’s latest Global Economic Prospects report offered cautious optimism, forecasting SA growth at 1.3% in 2025 (up from 0.6% in 2024). This week, global attention turns to Davos where the World Economic Forum Annual Meeting commenced today (19–23 January 2026) under the theme “A Spirit of Dialogue.” Discussions are centering on pathways for inclusive, innovation-driven growth amid a slowing and uncertain global economy, with heightened focus on trade tensions, tariffs, and geopolitical risks.

Last week, the Federal Reserve lowered the policy rate by 25 basis points to a range of 3.5%–3.75%, taking interest rates to their lowest level since 2022, while locally, National Treasury successfully issued South Africa’s first Infrastructure and Development Finance Bond…

Senior Portfolio Manager Jacques Simpson looks at how different asset classes have been performing and explores what this might tell us about how they are positioned for 2026…

Fixed Income Analyst Taku Makotore looks back at the themes which framed 2025 and explores what markets might expect from 2026…