Rand steady as markets await Fed decision and key local data

This is the final Daily Investment Update for 2025. We will resume on 19 January 2026. We wish you a peaceful holiday season and a prosperous New Year.

South Africa’s rand was steady on Tuesday after the government issued its first infrastructure and development finance bonds, with markets also looking ahead to this week’s US Federal Reserve policy meeting. By 12h58 GMT, the rand traded at 17.06 to the dollar, little changed from its previous close. Domestically, traders are awaiting retail sales data due on Wednesday, followed by mining and manufacturing figures on Thursday. On the Johannesburg Stock Exchange, the Top-40 index was last down 0.30%. South Africa’s benchmark 2035 government bond also weakened, with the yield rising 5.5 basis points to 8.51%.

In the United States, stock markets were largely flat on Tuesday as investors digested fresh labour market data ahead of the Federal Reserve’s interest rate decision. The S&P 500 edged up 0.10%, the Dow Jones added 90 points, and the Nasdaq hovered near the flatline. A 25bp rate cut on Wednesday is widely anticipated, with attention now turning to the Fed’s updated economic projections amid ongoing uncertainty over the pace of policy easing in 2026. Meanwhile, JOLTS job openings for September and October exceeded expectations.

In the United Kingdom, London’s FTSE 100 ended virtually unchanged at 9 642 on Tuesday, as investors awaited the Fed’s policy announcement. The Magnum Ice Cream Company - down 3.70% - was the day’s worst performer, falling a day after debuting as a standalone listed firm. Several investment banks began issuing their assessments, with JP Morgan assigning a ‘neutral’ rating and a €14 price target, noting that while the stock appears fairly valued relative to peers, it “has yet to prove itself as a listed player.”

Across Europe, equities closed slightly weaker, with the STOXX 50 slipping 0.10% and the broader STOXX 600 finishing near the flatline. Traders largely refrained from significant positioning ahead of the Fed’s decision tomorrow. Shares in EssilorLuxottica, the owner of Ray-Ban, fell 5.70% after Warby Parker announced it would launch AI-powered glasses developed in partnership with Google, intensifying competition in the smart eyewear market.

In Asia, Japan’s Nikkei 225 rose 0.10% to 50n635, while the broader Topix inched up 0.02% to 3 385, reversing early losses as gains in technology shares lifted the market. Sentiment in the global semiconductor sector improved after US President Donald Trump approved a deal allowing Nvidia to resume shipments of its H200 AI chips to China. Notable advancers included SoftBank Group (0.80%), Lasertec (3.60%), Disco Corp (4.70%), and Tokyo Electron (1.30%).

In China, the Shanghai Composite fell 0.37% to 3 910 and the Shenzhen Component dropped 0.39% to 13 277, giving back the previous session’s gains. Investors were disappointed after the Politburo emphasised the need to boost domestic demand in 2026 but signalled only a measured approach to future stimulus.

In commodities, WTI crude traded around $59 per barrel on Tuesday after falling 2% in the prior session, as expectations of a supply glut outweighed geopolitical concerns. Gold remained above $4 200 per ounce, supported by expectations of a 25bp rate cut this week, even as fresh labour data complicated the medium-term policy outlook.