What we know
Last week the Greenback had a blueish hue following the US midterm elections, and the Rand managed to gain moderately throughout the weekas South Africans also took to the polls for local government elections. The Rand started the week at 16.70 and gained nearly 20c to close at 16.51.
Going into the US midterm elections with Trump’s ratings at all-time lows, it seemed improbable that the Republicans would maintain control. The Democrats were able to take control of the House and the Senate, with many states that were historically Republican strongholds slipping towards the Democratic Party. Immediate effects saw a decrease of around $15 in the oil price following the result, while the Dollar weakened.
Locally, the ANC saw its weakest election results in about 15 years, and as with national elections, coalition government seems to be the way forward for South Africa. The DA was the only party to obtain a 50% majority in any province, maintaining control of the Western Cape. Its share of votes also increased in Johannesburg, taking the largest share of the votes but not obtaining at least 50%.
Turning towards financial data, US employment figures last week provided some Dollar support heading into the weekend but seemed underwhelming based on a figure of 165,000 jobs added, exceeding the forecast by 100,000. As the labour market seems stable given higher interest rates, the latest figure makes the Fed’s decision easier when considering a hike in December.
The S&P 500 and Nasdaq fell sharply on the election news, as the AI sector is faced with a government that is opposed to continued investment and growth in the sector.
What others say
Daily Maverick – Crossed Wires: What happens to Big Tech now after the midterms?
“Democratic Party midterm victories may tighten AI oversight, but surging demand, vast investment and Big Tech’s global reach will keep the industry expanding.“
Verity – Paraguay’s Peña Arrested, Transferred to Military Facility After Impeachment
“Paraguay’s ousted President Santiago Peña was placed under house arrest on Friday and then transferred to a military facility overnight as protests broke out. He is due to appear before prosecutors from the economic crimes unit on Saturday.“
Business Tech – 2026 election final results announced
“The election outcome marked a complete shift in tone for many municipalities, with the ANC suffering significant losses across the board.“
Visual Capitalist – The World Economy in 2040, in One Chart
“The global economy is projected to grow from approximately $124 trillion in 2026 to $227 trillion by 2040, an increase of 83% in nominal terms.“
What we think
Last week we said: “From a domestic perspective, South Africans will make their way to the voting stations on Wednesday as the 2026 local elections commence. Current surveys suggest the ruling party, the ANC, is at risk of losing its majority across multiple municipalities, and this will bring an interesting mix to the local currency if it proves to be true on voting day.”
As the above came true, the Rand stayed firm as markets seem satisfied at the moment with the results and how the impact of those results will be handled going forward.
Key data releases this week include core inflation data from the US, which will inform expectations around the final rate decision of the year in December. Also on the cards is UK GDP, which is expected to outperform the previous release on both a QoQ and YoY basis.
Our range for the week: R16.30 – R16.65.
Have a great week ahead.
