Global markets remain fixated on developments around the worsening Israel-Iran conflict. Locally, SA is working towards being removed from the Financial Action Task Force (FATF) ‘grey list’.
International Market Developments
President Trump has once again criticised Fed Chair Jerome Powell for not cutting interest rates. President Trump, however noted that he would not fire Powell ahead of the end of his term in May 2026.
On tariffs, the U.S President announced plans to send formal letters to key trading partners within the next one to two weeks, outlining unilateral tariffs intended to pressure countries into trade agreements. The latest tariff communications between Chinese and US officials struck a more positive tone following talks to dial down tensions. The US and China have agreed on a preliminary plan to ease trade tensions, which could revive the flow of sensitive goods between the two countries. The plan aims to resolve issues around shipments of rare Earth minerals and magnets, with US negotiators expecting the topic to be resolved in the framework implementation. The positive news flow has bolstered Asia with China and Hong Kong markets leading gains.
Oil prices rose after Israel launched a series of attacks on Iran’s nuclear facilities and said that it would continue its action until Iran’s perceived nuclear threat has been removed. Israel has declared a state of emergency in anticipation of missile and drone attacks by Iran. Israel has claimed that it had no choice but to attack Iran, saying that it had gathered intelligence that the country was approaching the point of no return in its development of a nuclear arsenal.
Local Market Developments
The Financial Action Task Force (FATF) has made an initial determination that South Africa has completed its 22-point action plan. The FATF granted SA an on-site assessment of the implementation of its Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) reforms, which will take place in the next few months. The assessment aims to verify that the implementation of AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation into the future. This would then pave the way for SA to be removed from the so-called FATF grey list at the FATF October Plenary.
Looking ahead, the data for May South Africa’s annual inflation is expected for release this week.