Monthly Market | June 2025
- albe9408
- Jul 7
- 11 min read
June was dominated by what was coined by Donald Trump as the 12-day war. Israel launched airstrikes on key Iranian nuclear sites—Fordow, Natanz, and Isfahan—killing nuclear scientists and military commanders, aiming to delay Iran’s nuclear progress. Global oil prices shot up over 10%, markets dipped, and security concerns escalated, with fears for the Strait of Hormuz. This narrow strait of about 30km sees 20% of global oil being shipped through it daily, but concerning to China, almost 90% of its oil passes through this strait.
The oil market’s response to the war in the Middle East teaches us that modern trading is less about what happens and more about what is believed to be possible. The threat of catastrophe inflates prices, but if there’s no escalation, we return to normal.
Crude Oil
President Trump ordered U.S. airstrikes on Iran’s nuclear infrastructure with technology that only the US has. Trump was reluctant to be involved in any war (part of his campaign), but Israel attacked Iran when it was politically isolated with both Russia and Syria not being able to help. Russia’s foreign ministry has condemned Israel’s attacks on Iran, calling them “illegal”. Seemingly ignorant of the hypocrisy, the statement added that only diplomacy would find a solution.
The largest role player, who has strong ties with Iran, is China who refrained from getting involved and pleaded for a political solution. If Iran were to block the strait of Hormuz, the Chinese economy might be crippled.
The strikes reinforced the U.S.–Israel strategic alliance but intelligence suggests Iran’s nuclear program was only temporarily delayed, raising proliferation concerns. Iran struck the Al Udeid Air Base in Qatar, launching missiles (most intercepted), in a calibrated counterattack. This, however, was more a token retaliation than a true counterattack.
After Iran's attack on Qatar, Trump publicly announced a ceasefire. Israel and Iran each agreed, emphasizing phased halts. Initial violations occurred but diplomatic pressure and mutual restraint have kept the ceasefire standing. Qatar played a key intermediary role alongside the U.S., with minimal formal monitoring, mostly relying on political enforcement
The operation strengthens Netanyahu’s hand domestically by portraying Israel as secure and decisive, but critics worry it perpetuates a “forever war” narrative. Trump capitalized on the situation, depicting it as diplomatic triumph, although media and legal critiques emerged.
The big discussion at the Globsec security conference in Prague was dominated by discussions on a war with Russia (when it might happen, how to prepare for it). The recent warning by German intelligence chief Bruno Kahl that Moscow could soon launch an attack on a European Nato member to test the alliance’s Article 5 mutual defence obligations was the leitmotif of the conference, evidence that the threat was being taken very seriously.
NATO's Hague Summit set a historic and ambitious defence target of 5% GDP by 2035—3.5% for core military and 1.5% for security/adaptation measures. Annual roadmaps and a 2029 review are in place to track progress. While most members agreed, Spain and a few others resisted, highlighting ongoing tensions over burden-sharing and economic capacity.
As far as tariffs from the US is concerned, imports have drastically reduced into the US. The graph below depicts how imports have sharply decreased through the different borders.
The US has effectively closed its borders
USA Nationwide Encounters - All Citizenships
It is uncertain what the final tariffs might turn out to be, but it is assumed that most will be at far lower levels than originally declared.
White House's tariffs agenda remains fluid
An estimate of long-term US tariff levels is still uncertain but rates are falling from peak
South Africa
Following Deputy Minister Andrew Whitfield’s firing by President Cyril Ramaphosa on June 26, the DA escalated tensions within the Government of National Unity (GNU). Whitfield was dismissed for undertaking an unsanctioned trip to the U.S., despite his claim that he had followed protocol and received no response to his travel request. DA leader John Steenhuisen denounced the move as a “calculated assault” and “flagrant double standard,” accusing the president of firing Whitfield while retaining ANC ministers implicated in misconduct. Steenhuisen demanded the dismissal of three other ministers within 48 hours (Nobuhle Nkabane, Thembi Simelane, and Deputy Minister David Mahlobo) threatening either a motion of no confidence or a DA exit from the GNU. The party has already begun disrupting the National Dialogue process and signalled it may vote against departmental budgets linked to reportedly corrupt ministers
Mbalula defiantly challenged the DA to “pack its bags” and leave, pointing out that other parties are ready to fill their spot. Steenhuisen, however, maintains that the DA will stay in the GNU to “course-correct” and block corrupt practices, even threatening a motion of no confidence if their demands are ignored. Experts are divided: some view the DA’s tactics as necessary checks, others as destabilizing to coalition governance.
Despite the turmoil, the rand seems stable (around R17-80 to the US$) while bonds continued their downward trend, with a small blip at the outbreak of the war. The downward trend in bonds shows positive sentiment towards South Africa and the expectation that the SARB might lower interest rates again later this year. This is good news for income funds that make capital gains when bond yields decline, but bad news for people who want to buy guarantees, as guaranteed rates will follow the downward trend in yield.
South Africa 20 Year Bond Yield
According to Statistics SA (Stats SA), headline inflation was 2.8% in May, unchanged from April, and below the lower bound of the SARB’s inflation target band. This was in line with the Reuters median. The biggest increase was recorded for food 4.8% (4% April). On the other hand, the biggest decrease was in restaurant and hotel inflation (1.8% from 3%) as well as transport inflation (negative 4.8% from negative 3.9% - lower oil price and stronger rand).
An update on the progress to be removed from the Financial Action Task Force (FATF) greylist has been published by National Treasury. The FATF confirmed that South Africa has substantially completed all 22 action items that were contained in the Action Plan adopted when South Africa was greylisted in February 2023. The completion of the Action Plan paves the way for the final step before the FATF can delist South Africa, which is an on-site visit to South Africa by the FATF.
The on-site visit will take place before the next FATF Plenary, and, if the outcome of the visit is positive, the FATF will delist South Africa from the greylist at its next Plenary in October 2025. Preparations for the on-site visit have commenced.
In its latest credit profile review, global ratings agency Moody’s indicates that there is little room for SA’s credit rating to move upward anytime soon. Moody’s expects a mild pickup in growth to about 1.8% by 2027, and government debt to stay around 80% of GDP for the next two to three years. The review of SA’s credit profile keeps SA’s Ba2 long-term issuer rating intact.
Deputy president Paul Mashatile has splurged almost R8m in expenditure on international trips since taking office in July 2024. He has visited various countries including the UK, Ireland, Botswana, Zimbabwe and Japan - his latest trip that cost more than R2.3m. While the deputy president has denied the misuse of state funds and maintains that the trips are critical for advancing SA’s foreign policy and economic interests, the costs have attracted criticism amid public concern over government spending.
Stability in the business confidence index at 45 points in the first quarter of 2025 masked broad-based weakness which has emerged in the second quarter survey. Sentiment has dipped to 40.
Mining minister Gwede Mantashe has withdrawn empowerment requirements on prospecting rights in the draft Mineral Resources Development Bill, after widespread criticism from the industry and experts that this would hurt investment.
Capitec CEO Gerrie Fourie is calling on SA to rethink its unemployment metric, contending that when the vast informal sector is considered, the headline figure of 32.9% could be closer to 10%. Fourie said Stats SA does not count self-employed people, and that is an area that should be corrected. He pointed out that according to Capitec’s information, there are significant numbers of people active in township informal markets, some with turnovers of R1 000 a day.
Snippets from the market
The US Fed kept interest rates unchanged at 4.25-4.5%, as Fed officials expect a rise in the inflation rate and continued economic policy uncertainty.
The People’s Bank of China (PBoC) kept key lending rates at record lows during the June fixing, citing that the country remains on track to meet its GDP growth target despite facing new US tariffs.
President Cyril Ramaphosa has announced plans to convene a national convention, scheduled for August 15, which will lay the groundwork for a national dialogue aimed at forming a new social compact.
DA federal chair Helen Zille is considering a return to frontline politics as Johannesburg mayor. This comes after three high-profile candidates, turned down the party’s approach to be nominees.
Parliament’s Portfolio Committee on Public Service and Administration says public sector workers should report in person to prove they are not ghost employees.
Water and Sanitation Minister, Pemmy Majodina, said that the country does not have a bulk water crisis, but that the supply of water is the main problem.
Since turning their attention to local government last month, President Cyril Ramaphosa’s Operation Vulindlela reform team has found that most municipalities increased spending on personnel by 84% between 2010 and 2024. Residents pay for salaries, not services, with a dramatic rise in staff costs, and a 31% drop in spending on infrastructure
The Bank of England kept rates unchanged at 4.25% on the back of rising geopolitical tensions in the middle east posing additional inflationary risks.
A major study published on 5 June in the prestigious Journal Science shows that dehorning rhinos is highly effective at reducing poaching in one of the most critical strongholds for these animals. The results showed poaching dropped by 78%, even though dehorning made up just 1.2% of the overall rhino protection budget.
Eskom CEO Dan Marokane told Parliament that it will cost the South African taxpayer up to R257bn for the utility to do the necessary upgrades for it to meet government-mandated minimum emission standards. The power utility said it planned to achieve a 40% reduction in emissions by 2030 at the fleet level.
The National Treasury said government will issue a request for proposals to open up SA’s electricity transmission network to private sector players in November.
SA business confidence edged up in May after a steep drop in the previous month, helped by a stronger rand, rallying stocks on the Johannesburg bourse and high gold and platinum prices, data showed.
A week after the Auditor-General revealed that the City of Johannesburg had awarded R972 m in suspect family-linked tenders, city spokesperson Nthatisi Modingoane has confirmed that the metro government sees nothing untoward and will not investigate. Six contracts valued at almost R1bn were made to the family of either a city official or councillor for the extension of the BRT/Rea Vaya bus system in 2023.
In what appears to be one of the most politically motivated cryptocurrency heists in history, the pro-Israel hacker group Gonjeshke Darande (Predatory Sparrow) infiltrated Iran’s largest crypto exchange, Nobitex, making off with between R1.5-billion and R1.8-billion in bitcoin, ethereum, dogecoin, XRP and solana. But here’s the twist: it wasn’t about the money. Instead, the hackers “burned” the stolen cryptocurrency, permanently removing it from circulation by sending it to inaccessible wallet addresses — a digital equivalent of setting cash on fire.
The dollar has been under pressure, hitting a three-year low on reports that Trump might replace Federal Reserve governor Jay Powell earlier than expected. Chair Jay Powell indicated that interest rate cuts are unlikely this summer, despite some board members advocating for them due to modest inflation.
Prime Minister Keir Starmer faces internal rebellion over proposed welfare cuts, with some MPs considering a leadership challenge.
UK vehicle production collapsed in May to the lowest level since 1949 after Trump’s tariff war forced some British carmakers to halt their shipments to the US
South Africa secured a $1.5 billion loan from the World Bank to revitalise its transport and energy infrastructure, aiming to stimulate economic growth and address persistent power outages.
The World Bank Group is considering a $500 million investment to support South Africa's entry into a new credit guarantee facility intended to attract private funding for a $25 billion transmission grid expansion.
OpenAI’s o3 model has a Mensa IQ score of 135, surpassing 98% of the human population
AI is changing the way we think and do business:
It is predicted that globally we need at least 2700 more data centres by 2030, which is more land than Singapore and will consume more energy than Japan!
ChatGPT “drinks” 1 litre of water every 40 commands. 2/3 of the planet will face water shortages
By 2029, there will be 25x more satelites in orbit than today
$94 trillion of infrastructure funding needed globally by 2040, 5x China’s GDP
China produces half of the world’s AI talent, and 70% of all the patents
The National Prosecuting Authority suffered another severe setback in the Free State asbestos corruption trial after the Free State High Court ruled that former Free State premier Ace Magashule's ex-personal assistant Moroadi Cholota's extradition from the US was unlawful and unconstitutional.
Former President Jacob Zuma has lost his bid to have charges related to the controversial arms deal filed against him dropped.
President Cyril Ramaphosa has taken his appeal against a high court judgment on the National Health Insurance to the Constitutional Court. In May, the Gauteng High Court in Pretoria found that the president’s decision to ratify the bill was reviewable and ordered that he furnish the court with the record that led to the decision.
Floyd Shivambu has been ousted as secretary-general of the MK Party and redeployed to join the party’s parliamentary caucus. This follows his controversial trip to Malawi to meet disgraced church leader Sheperd Bushiri. He now plans to start his own political party.
Transport minister Barbara Creecy is forging ahead with plans to create a national shipping carrier — 25 years after the state sold Safmarine to logistics major Maersk.
The department of transport has welcomed the enthusiastic interest shown by private-sector players in rail and ports projects that could help attract investment and expertise and help modernise SA’s troubled logistics infrastructure.
The Health Funders Association (HFA) has asked the high court in Pretoria to declare the National Health Insurance Act irrational and unconstitutional, marking the sixth legal challenge seeking to have the legislation set aside.
A large US study reported evidence to the American Society of Clinical Oncology that in older women diagnosed with breast cancer, use of estrogen creams to treat menopause symptoms was not only safe but was also linked with longer survival.
Microsoft founder Bill Gates says that most of his fortune will be spent on improving health and education services in Africa over the next 20 years.
Data released by Stats SA showed formal-sector employment starting this year on the back foot, with the country shedding 74 000 jobs in the first quarter.
The SA Revenue Service is shopping for cutting-edge AI technology to improve its efficiency, which it has said is at the heart of its bid to recoup about R800 billion in uncollected taxes.
Parliament's select committee on education has criticised the guidelines issued by the basic education minister advising provincial education departments on how to implement the contentious Basic Education Laws Amendment Act.
Former Transnet chief financial officer Anoj Singh, former CEOs Brian Molefe and Siyabonga Gama, and former engineering chief executive Thamsanqa Jiyane were each granted R50 000 bail after being arrested for 10-year-old state capture involvement.
The Democratic Alliance has laid criminal charges against Higher Education and Training Minister Dr Nobuhle Nkabane after she misled the Portfolio Committee on Higher Education over the appointments of the chairperson of the Seta boards and regarding her independent panel
South Africa’s May trade surplus rose to R21.7bn, boosted by exports, gold prices and lower oil prices. The budget deficit narrowed mainly thanks to seasonal spending cuts. This supported the rand which gained against the US dollar and various other currencies.
From 30/04/2024 to 30/06/2025
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