What we know
Last week the Rand traded at the best levels that we have seen in October, even as oil continued to climb. However, the moment oil broke through the $110/barrel level, that resilience crumbled, and the Rand briefly breached the top of our predicted range at 16.60.
The Pound was able to gain some momentum last week with a stronger unemployment rate combined with higher inflation. The BoE keptinterest rates unchanged at 3.75% at the previous meeting, and this week’s market data has reinforced expectations of a rate increase at the 5 November meeting, which would take the rate to 4%.
The Euro remains subdued as political tensions remain heightened and protests intensify. After starting in France, riots have spread to major cities in seven European countries. The French debt burden continues to increase (now sitting at around 122% of GDP) amid a deepening budget deficit.
Last week we said that “the oil price briefly tested the $110/barrel level on Friday, and a break through this level would be worrying for markets as the conflict remains front of mind.”
Markets continued to test the $110 level until Friday trading saw a spike to $117, and the Rand followed suit, weakening to 16.60 to end the week. With major factors driving the market globally, the Rand seems to be taking advantage of the fact that things locally are more stable, relatively speaking. In the absence of any news directly causing Rand weakness, the Rand’s movement is currently dependent on oil price fluctuations. We have, however, seen oil come back to $110 at the time of writing, and the Rand remains weak.
What others say
Reuters – US political candidates tailor messages for AI models used by voters
“US political candidates have been engineering their campaign messages to appeal to the AI chatbots that more voters have been using to answer questions about issues, and documents seen by Reuters have revealed some of their strategies.“
Daily Maverick – Godongwana says coveted investment-grade status is now ‘within reach’
“The yield on the benchmark 10-year government bond fell 20 basis points to 8.72% — a big thumbs-up. By revealing contrast, Mexico’s 10-year bond yield is around 9.30% — and Mexico has an investment-grade rating.“
Morningstar – Brazil-Exposed Companies Slide After Surprise Lula Victory — Update
“Shares in Brazil-exposed European companies fell after a surprise victory for leftist incumbent Luiz Inacio Lula da Silva over right-wing contender Flavio Bolsonaro in Sunday’s presidential election.“
Visual Capitalist – Ranked: The World’s 30 Largest Banks in 2026
“This graphic ranks the world’s 30 largest banks using S&P Global Market Intelligence’s April 2026 ranking, based primarily on year-end 2025 financial statements.“
What we think
The week ahead is filled with central bank interest rate decisions, with the headline being the Fed. The Fed is expected to keep rates unchanged, while it is anticipated that the last meeting of the year will bring another hike. The ECB and BoJ are also expected to hold rates steady, while the market expects a 25-basis-point increase from the Bank of Canada.
Next week the US will host the midterm elections, which are expected to be a very close struggle between the Republicans and the Democrats. Recent polls indicate that there is a chance for the Democrats to gain control of both the House of Representatives and the Senate, which would have significant impacts on the remainder of Trump’s term in office.
Locally, there is also expected to be a shift as voters become discouraged by corruption and the lack of service delivery. Johannesburg is the metro to watch in these municipal elections, as the DA has made progress in gaining voting share in the financial capital.
Both elections could be supportive of the respective currencies, and markets can be expected to show some volatility leading up to the elections and their results.
Our range for the week: R16.45 – R16.75.
Have a great week ahead.
