Market Commentary | The week that was

On Thursday, 7 July, the global ratings agency, Fitch, affirmed SA's BB- long-term foreign and local currency debt ratings, while keeping a stable outlook. The news comes despite Eskom’s ongoing power supply problems and high inflation levels. Fitch said that the affirmation took into consideration that the government's debt trajectory was lower than previously anticipated.

On Friday, 8 July, US jobs data was released, reaffirming that the US economy remains quite robust and has temporarily allayed recession fears. This opens the way for the Federal Reserve Bank (FED) to continue its aggressive rate-hiking trajectory. The June payroll number printed at 372,000 jobs added, compared to the 268,000 expected by the market. The US unemployment rate is unchanged at 3.6%. The upbeat US June payroll report already has the market expecting a rise of 75 basis points from the FED, which has sent bond yields and the dollar higher.

The South African rand is trading on the backfoot as the mighty dollar continues to flex its muscles, trading at its highest level this year.

Looking at the week ahead: On Wednesday the US Consumer Price Index (CPI) data for June will be released, which is expected to reflect the continuing inflation increase.