The domestic highlight of last week was the Q1 2026 GDP print, which came in ahead of expectations. South Africa’s economy expanded 0.5% quarter on quarter, up from 0.4% in Q4 2025 and the sixth consecutive quarter of growth, beating the Bloomberg consensus of 0.3%. On an annual basis, growth accelerated to 1.9%, also ahead of the 1.8% forecast. Finance, real estate, agriculture, trade, and transport were the primary drivers, with agriculture posting its sixth straight quarter of expansion at 3.9%. The trade sector similarly extended a six-quarter winning streak, supported by stronger wholesale trade, motor trade, and food and beverage activity.
The numbers are encouraging on the surface, but the details warrant some caution. Fixed investment declined despite the broader expansion, and domestic demand remains soft, a combination that raises legitimate questions about the durability of the growth trajectory.
On the ratings front, Fitch upgraded South Africa to BB on 5 June, moving it in line with Moody’s and S&P, both of which also carry positive outlooks. National Treasury welcomed the move as an endorsement of fiscal policy and a signal that investment-grade status is within reach if the reform momentum holds. The upgrade is notable given the dimming global growth backdrop and the inflation pressures stemming from the Iran conflict. South African assets have also benefited from the country’s removal from the FATF grey list and the Reserve Bank’s adoption of a 3% inflation target last year, a policy shift that delivered a meaningful decline in government bond yields. The benchmark 10-year yield is now roughly 150 basis points lower than a year ago, and the rand, despite modest weakness since the Middle East conflict escalated in late February, remains about 9% stronger against the dollar year on year, trading at R16.28 last week versus R16.55 the previous week.
The JSE All Share closed last week up 1.3%, with financials, industrials, and listed property all firmly in the green. Resources underperformed last week, weighed down by the commodity price volatility tied to Middle East uncertainty.
Week in Review: Blast Off
In This Edition:
SPACEX LISTING SETS THE TONE AS MARKETS ABSORB A MAJOR GROWTH STORY
SpaceX’s record-breaking IPO dominated the week, reinforcing investor appetite for large-scale growth themes even as broader markets navigated geopolitical volatility.
Read more…
US INFLATION PRESSURES KEEP FED GUIDANCE FIRMLY IN FOCUS
Mixed inflation data, stronger producer prices and cautious consumer sentiment place renewed emphasis on the Fed’s policy guidance and the risk of higher rates later this year.
Read more…
GLOBAL MARKETS RESPOND TO SHIFTING POLICY AND GEOPOLITICAL SIGNALS
Europe, the UK and Asia reflected a complex mix of policy expectations, growth concerns and geopolitical de-escalation, with investors weighing regional risks against improving sentiment.
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COMMODITIES ADJUST AS OIL EASES AND GOLD FACES RATE PRESSURE
Oil prices softened on hopes of reduced Middle East disruption, while gold remained elevated but under pressure from expectations of tighter monetary policy.
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SOUTH AFRICA’S GROWTH AND RATINGS MOMENTUM SUPPORT CAUTIOUS OPTIMISM
Stronger-than-expected GDP growth and Fitch’s upgrade improved the domestic backdrop, although weak fixed investment and soft demand suggest the recovery still requires careful monitoring.
Read more…
MARKET MOVES OF THE WEEK
CHART OF THE WEEK
SpaceX stole the headlines this week, making its long-awaited stock market debut in what became the largest IPO in history. Trading under the ticker SPCX, shares opened at $150 and surged as high as $176.52 before closing at around $161, a 19% gain on day one, valuing the company at $2.1 trillion. Extended-hours buying added another $100 billion to that figure. The $75 billion raised in the offering eclipses every IPO that came before it, and with over 500 million shares changing hands, the debut drew comparisons to Facebook’s first day in 2012, which saw roughly 580 million shares traded.
SpaceX listing sets the tone as markets absorb a major growth story
The defining story of the week was SpaceX’s long-awaited stock market debut, which became the largest IPO in history. Trading under the ticker SPCX on the Nasdaq, the stock surged 19% on its debut, closing at around $161 and briefly trading as high as $176.52 before extended-hours buying pushed the implied market cap above $2.2 trillion. The $75 billion raised in the IPO is the largest in history by a considerable margin. Elon Musk, who flagged on a pre-IPO JPMorgan livestream that SpaceX has been cash-flow positive since roughly 2015, framed the listing as capital-raising for a “significant growth phase”, one that includes putting over 100,000 satellites in orbit and building AI data centres in space. It’s worth noting that Starlink remains the only profitable segment of the business today. The IPO also made Musk the world’s first trillionaire, based on his combined stakes in SpaceX and Tesla.
Beyond the blockbuster debut, broader equity markets managed to close the last week in positive territory despite a turbulent ride. Small-caps led the charge, while the S&P 500, Dow, and Nasdaq each added over 0.65%. The last week’s dominant macro theme remained the US-Iran conflict. Markets swung between risk-off and risk-on as missile exchanges, threatened US strikes, and Trump’s last-minute cancellation of those strikes all unfolded in rapid succession. By Friday, cautious optimism around a potential peace deal was the prevailing mood.
US inflation pressures keep Fed guidance firmly in focus
The US inflation picture last week was a study in contradictions. Headline CPI came in at 4.2% year on year in May, the highest since April 2023, driven largely by the energy shock from the Strait of Hormuz closure. On a month-on-month basis, however, CPI rose just 0.2%, below expectations and the second consecutive month of decelerating price growth. Core CPI similarly moderated, rising 0.2% versus 0.4% the prior month.
Producer prices told a different story. PPI jumped 1.1% month on month, well above the 0.7% consensus, with energy goods up 10.7%. Year on year, PPI hit 6.5%, the highest since November 2022. The components that feed into core PCE, the Fed’s preferred gauge, are now pointing to a 0.4% print when that data lands later this month. That figure, if realised, keeps a rate hike firmly on the table before year-end.
Consumer sentiment edged up to 48.9 in June (a 4.1-point improvement from May), with some relief from early-month easing in petrol prices. But the mood remains cautious as inflation expectations for the year ahead sit at 4.6%.
Global markets respond to shifting policy and geopolitical signals
In Europe, the European Central Bank delivered its first rate hike since September 2023 on Thursday, raising three key rates and flagging an “uncertain” outlook with upside inflation risks and downside growth risks. Updated forecasts now put eurozone inflation at 3.0% in 2026, moderating to 2.0% by 2028, while GDP growth was revised down to 0.8% for 2026. European equity markets were mixed last week, though sentiment improved sharply on Friday as peace deal optimism took hold.
In the UK, April GDP contracted 0.1% month on month, a reversal from March’s 0.3% growth, with services the main drag. The data reinforces expectations that the Bank of England will hold rates at its 18 June meeting. The FTSE 100 added 1.0% for the last week.
In Asia, Japan’s Nikkei fell 0.85% over a volatile week, recovering sharply on Friday alongside the broader geopolitical de-escalation. The BoJ is widely expected to raise rates by 25bp to 1.0% at its 15–16 June meeting, its first hike since December 2025. The yen remained pinned around JPY 160 to the dollar. In China, the picture was mixed: the Shanghai Composite was flat for the last week (+0.09%), while Hong Kong’s Hang Seng fell 0.98% amid weaker offshore sentiment.
Commodities adjust as oil eases and gold faces rate pressure
Gold held around $4,200/oz but is on track for a second consecutive weekly decline as rate-hike expectations weigh on the metal. Brent crude fell 3.4% to $87.3/barrel on Strait of Hormuz reopening hopes, leaving oil down roughly 6% last week, though prices remain over 20% higher since the initial US-Israel strikes on Iran in late February.
This week’s key event is the Fed’s first policy meeting under new Chair Kevin Warsh. A hold is fully priced in, but the forward guidance matters enormously, specifically whether Warsh signals openness to hiking later this year. With core PCE likely to print at 0.4% and PPI-driven pipeline pressures building, the tone of the press conference will set the market’s direction into month-end. Simultaneously, the BoE, BoJ, RBA, Riksbank, SNB, Norges Bank, and the Brazilian central bank all meet on rates. Progress, or the absence of it, on the US-Iran deal is expected to continue to drive oil prices and broader risk sentiment throughout the last week.
South Africa’s growth and ratings momentum support cautious optimism
The domestic highlight of last week was the Q1 2026 GDP print, which came in ahead of expectations. South Africa’s economy expanded 0.5% quarter on quarter, up from 0.4% in Q4 2025 and the sixth consecutive quarter of growth, beating the Bloomberg consensus of 0.3%. On an annual basis, growth accelerated to 1.9%, also ahead of the 1.8% forecast. Finance, real estate, agriculture, trade, and transport were the primary drivers, with agriculture posting its sixth straight quarter of expansion at 3.9%. The trade sector similarly extended a six-quarter winning streak, supported by stronger wholesale trade, motor trade, and food and beverage activity.
The numbers are encouraging on the surface, but the details warrant some caution. Fixed investment declined despite the broader expansion, and domestic demand remains soft, a combination that raises legitimate questions about the durability of the growth trajectory.
On the ratings front, Fitch upgraded South Africa to BB on 5 June, moving it in line with Moody’s and S&P, both of which also carry positive outlooks. National Treasury welcomed the move as an endorsement of fiscal policy and a signal that investment-grade status is within reach if the reform momentum holds. The upgrade is notable given the dimming global growth backdrop and the inflation pressures stemming from the Iran conflict. South African assets have also benefited from the country’s removal from the FATF grey list and the Reserve Bank’s adoption of a 3% inflation target last year, a policy shift that delivered a meaningful decline in government bond yields. The benchmark 10-year yield is now roughly 150 basis points lower than a year ago, and the rand, despite modest weakness since the Middle East conflict escalated in late February, remains about 9% stronger against the dollar year on year, trading at R16.28 last week versus R16.55 the previous week.
The JSE All Share closed last week up 1.3%, with financials, industrials, and listed property all firmly in the green. Resources underperformed last week, weighed down by the commodity price volatility tied to Middle East uncertainty.
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