Monthly Market | January 2026
- Feb 10
- 11 min read
International
While tariffs were implemented, the hard landing many feared did not materialise. Several major economies cut interest rates, and many equity markets—particularly outside the US—proved resilient in 2025, recovering sharply after Trump’s “Liberation Day” tariff shock.
Risk assets have been buoyant at the start of 2026. Equities have pushed to fresh highs, key commodities have been strong, and geopolitics continues to move quickly. It’s a useful prompt to stay disciplined and selective as opportunities and risks emerge. From the graph below, in rand terms (strong rand detracted from S&P500) it is evident that it was mainly a resources cycle. Most of the JSE returns were resource-based and if a fund manager refrained from using that, returns in SA would have been subdued.
From 27/01/2025 to 27/01/2026
Gold reached $5 100 an ounce, a clear indication that its breaching of $5 000 was an emphatic move. Gold’s rally has been nothing short of breathtaking: it hit both the $3 000 an ounce and $4 000 an ounce levels in 2025, driven by mounting uncertainty and geopolitical tensions fanned in large part by the second Trump administration in the US. In the process, it took the rand along for a ride which breached the below R16/$.
Bloomberg Prescious Metal Index
Precious Metals have not rallied like this since the stagflationary 1970s
Global growth has proven sturdier than feared despite a harsher trade regime, but remains pedestrian by historical standards as protectionism, fiscal strain and political fragmentation sap momentum. Escalating tariffs have hardened into a structural feature of global policy, unsettling markets and redrawing supply chains without tipping the world into recession. Domestic demand has acted as a quiet stabiliser, supported by resilient labour markets and adaptive firms. Inflation paths are diverging sharply. China is easing into disinflation amid industrial overcapacity, Japan is tightening cautiously to defend its fragile exit from deflation, while Europe remains wary of cutting rates too aggressively. The United States (US) stands apart.
US Global Tariff Rate
Annual tariffs have lagged the effective rates due to delayed payments,
litigation and shipping times
Both the USA and South Africa decided by the end of January not to cut interest rates any further. In the case of the USA, inflation concerns are still present, with inflation having risen slightly, while South Africa’s policymakers followed the USA’s decision as pressure has eased somewhat. However, two members wanted to cut rates further. In both cases, rates could still be cut through 2026, with South Africa likely to see a further two 0.25% reductions. The US Federal Reserve is expected to keep rates unchanged through the first half of the year- a 25bp cut is projected in June (LSEG data).
The US raid that captured Venezuela’s Nicolás Maduro and renewed tensions with Denmark over Greenland have jolted markets, while the wars in Ukraine and the Middle East continue to keep volatility elevated. In a symbolic 52–47 vote, five GOP lawmakers joined Democrats in advancing a resolution that would limit President Trump’s ability to launch further military strikes on Venezuela. Venezuela’s crude oil reserves are about 17% of global reserves, yet it produces less than 1% of world output and exports roughly half of what it produces. No wonder Trump wants to control the country… Trump’s threats of expansion are reminiscent of Nazi Germany prior to the invasion of Poland in 1939. Something to be concerned about.
World Economic Forum in Davos presented a “spirit of dialogue”. Trump backtracked on his threat to impose tariffs on EU countries who support Greenland, but Greenland is not off the table. Trump said he had reached the outlines of a deal with NATO on the island's future.
Trump signed a charter establishing a “Board of Peace,” which he will chair. In November, the UN Security Council approved a Gaza-focused Board of Peace. It’s a new international body intended to address global conflicts, starting with the Gaza war. Trump insists that that the board will cooperate with the United Nations, despite the initiative sparking international concern that it could rival or undermine the UN, particularly as it requires permanent members to contribute $1 billion each. Trump’s board has faced scepticism from U.S. allies; many of whom have not committed to participate. French President Emmanuel Macron said the European Union should not bend to "the law of the strongest", adding that it was "crazy" that the bloc was having to contemplate using its "anti-coercion instrument" against the United States. France and the UK have so far declined or expressed caution about the new diplomatic framework.
European equities advanced on improving sentiment and stronger than expected economic data, which fuelled cautious optimism. Gains were supported by positive surprises in German industrial activity, resilient eurozone retail sales and inflation easing to the ECB’s target of 2%•
In another trade spout, China tells their tech firms to halt Nvidia H200 orders as it prepares to mandate domestic AI chips, signalling deepening tech tensions with the US and puts pressure on Nvidia’s China sales.
Rio Tinto and Glencore are in early stage talks about a potential takeover of “some or all” of Glencore. Glencore’s share price jumped over 10%, while Rio’s fell up to 3%. Rio has until 5 February to make a formal offer or withdraw.
Japan’s economy in 2026 is experiencing a moderate recovery, supported by government stimulus, accommodative monetary policy, and rising wages, though growth remains fragile. Real GDP is projected to expand by about 0.8%, slower than 2025’s 1.2%. Wage increases above 5% for two consecutive years signal a shift from deflationary stagnation toward growth, yet inflation and high food prices continue to weigh on consumption. External risks, including U.S. trade policies and yen depreciation, pose challenges. Overall, Japan is transitioning toward a more sustainable growth model, but structural weaknesses and sluggish potential growth remain concerns. This might be a slumbering giant for investors.
South Africa
SA is operating in a fragmented global environment, but favourable commodity prices and lower oil costs have provided partial insulation, supported the rand and improving terms of trade. Firmer fiscal discipline has lifted investor confidence and underpinned a sovereign credit rating upgrade. Reform progress remains incremental, however, with subdued fixed investment, coalition politics and policy uncertainty constraining growth. Encouragingly, anchored inflation (3%) expectations and a firmer currency have widened policy space, giving the SARB scope for cautious interest rate cuts in 2026.
The rand rallied to a near three-year high as sentiment towards SA remained positive, with the ALSI hitting record levels (resource sector still driving returns) and bond yields subdued. The rand is expected to strengthen further in 2026, with forecasts suggesting it could trade in a band of around R15.80 - R16.50/USD. Robust local monetary policy and improved investor sentiment (ratings agencies, grey list) are supporting the currency, while global risks such as US Federal Reserve decisions and geopolitical tensions remain the main threats to the rand’s (and markets’) outlook.
The rand not only strengthened against the dollar (with dollar weakness) but also gained against the pound and euro since the announcements of tariffs in April 2025. Much of this is therefore rand strength. The rand also breached the R16/$ level during January 2026.
ZAR Performance
From 08/04/2025 to 27/01/2026
Average inflation for 2025 was only 3.2%, the lowest in 21 years, according to Statistics SA. This opens the door for further rate cuts in 2026. In the beginning of 2025, forecasts on inflation were that it would end the year slightly above 4% before slowly declining to 3.6%. The lower-than-expected rate, as well as the fact that it seems to be accepted even by trade unions in wage negotiations, is doing much to keep ratings agencies positive about SA.
Average consumer inflation for 2025 was the lowest since 2004
The next most recent year in which average inflation was below 3.2% was 1969.
South African Reserve Bank Governor Lesetja Kganyago said he favours ending the use of prime, the main reference rate commercial banks use to price loans to clients, to create more transparency for consumers. This might increase competition among banks to the benefit of the consumer.
Households reliant on Eskom can expect the outcome of the electricity hike revision on 1 April this year. NERSA said the percentage or amount of the increase would only be known after a thorough assessment of the facts and evidence before the regulator.
A national disaster has been declared after recent severe weather conditions that have led to floods and loss of lives. The extreme weather, which saw up to 400 mm fall in a few days, has claimed the lives of 37 people and caused more than R4 billion in infrastructure damage. Inversely, extreme drought in the Eastern Cape and a spate of veld fires claimed property and lives and is exacerbated by the water availability countdown to day zero in many Eastern Cape towns.
Snippets from the market.
In a recent study done at Momentum it was determined that clients that have financial advisors end up having 9.5x more investment value attributed to their investments. This demonstrates the value that financial advisors give to clients through the lifetime of any individual client and their family.
Republicans are, for once, a little shy to support Donald Trump’s federal probe into Fed chair Jerome Powell. Trump has been vocal about his desperation to dramatically reduce rates.
Driven in part by new sources of demand – notably the surging energy needs of AI – looming copper shortages could undermine electrification, the renewable energy drive and the global economy, a situation that poses a “systemic risk for global industries, technological advancement and economic growth”, S&P Global warns in a new report.
The suspended Independent Development Trust CEO, Tebogo Malaka, has opted to resign from her position instead of facing a disciplinary hearing over her alleged role in attempting to bribe a journalist. The entity’s former spokesperson has also resigned.
The US is withdrawing some of its personnel from bases in the Middle East after Iran warned that it would retaliate against any American strikes. All this while Iran’s leadership tries to quell the worst domestic unrest the country has seen, in a bid to avoid any direct US intervention. SA refuses to criticise Iran’s human rights violations. Speaking of double standards…
The US focus on Venezuela oil has at its heart the life vein it offers to a communist Cuba, with Marco Rubio (his parents immigrated from Cuba in 1959, before the Castro war) having an ideological support for placing a heel on Cuban life support, slowly pressuring it.
What makes X’s AI chatbot, Grok, particularly dangerous compared with traditional editing tools is its public nature. Media lawyer Emma Sadleir of the Digital Law Company said that while users once privately relied on software like Photoshop before deciding to share an altered image, Grok publishes the content automatically for the world to see.
The world is facing irreversible water "bankruptcy", with billions of people struggling to cope with the consequences of decades of overuse as well as diminishing supplies from lakes, rivers, glaciers and wetlands.
Targeted poaching of lions for their body parts is increasing across Africa and may now pose an existential threat to the species.
Defence Minister Angie Motshekga has ordered a board of inquiry to establish why President Cyril Ramaphosa’s instructions to the SA National Defence Force (SANDF) to withdraw Iran from the multinational naval exercise in False Bay were not obeyed.
After a public outcry and a wave of negative publicity, medical scheme administrator Discovery Health has reversed its controversial decision to recover the money it accidentally paid out for mistakenly covered medicine claims to 16 507 of the scheme’s beneficiaries.
The US House of Representatives approved the three-year extension of the African Growth and Opportunity Act, which expired in September. The legislation is expected to go before the Senate early this year before it is handed to President Donald Trump for his signature. However, South Africa may be treated differently.
South Africa will embark on a decade‑long national vaccination campaign to curb the outbreak of foot-and-mouth disease, says Agriculture Minister John Steenhuisen. There is massive friction between organised agriculture and the government on how this issue is resolved. Many vaccinations are expected soon, but agriculture feels the process should be de-centralised.
The appointment of Andy Mothibi as the new national director of public prosecutions has drawn a positive response from South Africa’s business community.
Axed Environment Minister Dion George has resigned as an MP and terminated his DA membership after a spat with party leader John Steenhuisen.
During the ANC’s 114th birthday celebration President Cyril Ramaphosa lectured his African National Congress party for failing to meet the basic needs of many South Africans.
ActionSA has criticised the culture of executive indulgence in the Government of National Unity after cabinet ministers spent nearly half a billion rand on travel and accommodation expenses in their first 18 months of office.
South Africa has been officially removed from the EU’s list of “high-risk third country jurisdictions” after the country’s exit from the Financial Action Task Force greylist in October last year. This also follows South Africa’s removal from the UK’s list of high-risk countries for money laundering and terrorist financing.
Rio Tinto Group is in talks to buy Glencore Plc to create the world’s biggest mining company with a combined market value of more than $200 billion.
Maize prices have dropped between 40% and 50% compared to the same time last year.
The Agricultural Business Chamber of South Africa has raised concerns about the growing trade imbalance between South Africa and its BRICS partners.
Eskom has offered assurances that the power system is more stable and predictable than it has been for the past five years, with a strong recovery in the energy availability factor and a decline in unplanned breakdowns.
Western Cape Province is preparing a submission to cabinet to have the province declared a disaster area, as devastating wildfires and a deepening water crisis place mounting pressure on resources.
Sustained heavy downpours have caused severe flooding in Limpopo Province, with certain areas receiving the highest rainfall for 40 years.
British American Tobacco in South Africa will shut its only local factory (Heidelberg) and end SA production by end-2026 citing the growing illicit cigarette market. Around 230 jobs are at risk.
Nuclear business is booming, but in a good way. To meet global energy and climate goals, 2024’s record electricity generation from nuclear energy “is a record that needs to be bettered again and again, every year, by increasingly larger margins”, says the World Nuclear Association. Unfortunately, SA seems to have missed the boat.
President Cyril Ramaphosa, and political and community leaders have expressed their condolences to the families of 14 children who were killed in a horrific crash between a minibus taxi and truck in Vanderbijlpark.
Denel has informed workers at its two divisions it is unable to pay staff salaries for this month, an untenable situation that trade union Solidarity and the National Union of Metalworkers of South Africa said is deeply concerning, as the state-owned arms manufacturer received almost R2 billion in a government bailout.
The Department of Water and Sanitation plans to avail an emergency relief allocation of R20 million from reprioritised water services infrastructure grants to Knysna municipality.
Authorities are struggling with the endemic spread of SAT1 and SAT2 strains of Foot and Mouth Disease, leading to quarantine, increased biosecurity calls, and potential National Disaster declaration to mobilise resources for vaccination and containment.
The South African government has spent more than R3.7 billion on VIP and static protection for politicians and some traditional leaders in the 2024/25 financial year, with the amount projected to balloon in the next financial year. Ridiculous!
US Inflation ticks up to 2.8% in November as the Fed’s preferred gauge shows prices edging further from its 2% target. Consumer spending remained resilient, climbing 0.5%.
Russia’s mass attack on Ukraine’s energy infrastructure left over a million people without power or heat in sub-zero temperatures as emergency crews raced to restore services.
China’s Q4 growth slows to 4.5%, weakest in 3 years as consumer spending misses targets and investment slumps. Full-year GDP still hit 5%, matching targets and fuelled by strong exports.
Africa’s trade deficit with China surged to a record $102 billion in 2025, driven by rapidly rising Chinese exports that far outpaced Africa’s modest export growth.
British Prime Minister Keir Starmer met China’s President Xi Jinping and discussed building a “sophisticated relationship” between the two countries to strengthen security and the economy.
Julius Malema will have to wait three more months to hear whether the Economic Freedom Front leader will face jail time for firing an assault rifle into the air more than six years ago.
Herman Mashaba’s ActionSA has partnered with the Creatives Congress Movement and the Azanian Independent Community Movement ahead of the looming local government elections.
The government is preparing to launch a new version of the Transformation Fund. Insiders say companies will be able to earn 30 broad-based BEE points by contributing 3% of net profit after tax to the fund. For companies in the midrange, a single contribution could lift them into level 3 or higher, improving access to government and corporate procurement without changes to ownership or management.
Treasury director-general Duncan Pieterse says South Africa’s budget will show government debt stabilising relative to gross domestic product for the first time in almost 20 years.
Finance Minister Enoch Godongwana ruled out any major tax changes in next month’s budget.
Sasol has warned its clients of potential disruptions to the supply of natural gas from Mozambique after severe weather and flooding affected operations across the border.
The National Energy Regulator of SA has approved Eskom’s application to cut the electricity tariffs of two ferrochrome smelters by 35% for the next 12 months.
Trump’s nomination of Kevin Warsh supported the dollar and inversely halted the bun on commodities.
Daily Maverick
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