Midas touch lifts SA assets ahead of SARB decision

Global markets ended the week on a cautiously positive note, with investors balancing improving risk sentiment against lingering concerns around global growth, interest rate trajectories and earnings momentum.

South Africa’s 10-year government bond yield continued to edge lower, easing towards 8.10% and reaching its lowest level since July 2019, as confidence in local assets strengthened. The improvement has been supported by firmer fiscal fundamentals and increased political stability. Attention now shifts to the South African Reserve Bank’s (SARB) policy meeting on 29 January 2026. While softer inflation and a firmer rand provide some scope for easing, the prevailing expectation is that the repo rate will remain unchanged at 6.75%. 

The rand extended its recent gains, strengthening to around 16.00 against the US dollar, its strongest level since June 2022, aided by elevated commodity prices and ongoing uncertainty surrounding the US economic outlook. Local equities also advanced, with the JSE All Share Index (ALSI) rising 1.87% to close at 124 563.48. The Top 40 gained 2.06%, while the Industrial 25 slipped 0.25%. Resource 10 increased 5.61%, with the JSE Metals and Mining index surging 6.23%.

In company news, Pan African Resources announced its intention to declare an interim dividend for the first time since its JSE listing nearly two decades ago, underscoring continued strength in gold markets. 

On the commodity front, precious metals recorded strong gains. While demand is expected to ease slightly this year, the World Gold Council estimates that global holdings could still rise by up to 950 tonnes, remaining well above long-term averages. Gold climbed more than 1% to $5 095.82 per ounce, extending its record-breaking run as safe-haven demand intensified amid ongoing trade and geopolitical tensions. Silver surged 12.79%, while platinum advanced 11.85%. By contrast, Brent crude edged marginally lower, slipping 0.02% to $65.75 per barrel.

US equities opened the week higher despite elevated political and policy uncertainty. The S&P 500 rose by 0.56%, the Dow Jones Futures increased by 0.32%, while the Nasdaq gained 0.69%, led by communication services, utilities and technology stocks. Investor focus is firmly on a busy week ahead, featuring a heavy slate of corporate earnings, the Federal Reserve’s (Fed) first policy decision of the year and speculation that a new Fed chair could be announced this week.

Stock-specific moves were mixed. Apple climbed 1.60% ahead of its earnings release after JPMorgan lifted its price target, while Meta added around 1% and Microsoft was little changed. Tesla fell 2% as investors awaited results and Nvidia edged 0.40% higher after announcing a further $2 billion investment in CoreWeave. Smaller-cap names also drew attention, with USA Rare Earth surging more than 21% following confirmation of a US Department of Commerce equity stake. In the background, political risk resurfaced after President Donald Trump filed a $5 billion lawsuit against JPMorgan Chase and its chief executive, Jamie Dimon, highlighting renewed tensions between the administration and Wall Street. 

US Treasury yields declined, with the 10-year falling below 4.22% amid renewed shutdown concerns, while the dollar weakened for a third straight session, slipping to its lowest level in over four months ahead of the Fed’s policy announcement.

European equities finished modestly higher on Monday, buoyed by solid performances from major banks and utility stocks. Investors largely looked past renewed concerns around global trade tensions and continued to weigh the outlook for interest rates across the Eurozone. The STOXX 50 edged up 0.20% to 5 959, while the broader STOXX 600 advanced 0.30% to 610.  Germany’s DAX 40 ended the session marginally higher, closing at 24 950, while London’s FTSE 100 edged up 0.13%.  Sentiment was supported despite comments from Canadian Prime Minister Mark Carney, who stated that Canada has no plans to enter into a free trade agreement with China. His remarks followed a warning from US President Donald Trump that a 100% tariff would be imposed on Canada should such an agreement be reached.

Asian equity markets closed lower on 26 January, led by a sharp pullback in Japan. The Nikkei fell 1.79%, while declines elsewhere were modest, with Shanghai easing 0.03% and Hong Kong shares down around 0.2%. Sentiment remained cautious across the region ahead of key economic releases, including China’s industrial profit data and upcoming PMI readings, although recent liquidity injections by the central bank helped limit broader losses in mainland equities.

Currency markets were volatile, particularly in Japan, where the US dollar weakened by about 1.23% against the yen to trade near 153.80, after briefly touching its lowest level since mid-November 2025. In China, the 10-year government bond yield slipped below 1.83% as demand for offshore yuan assets increased.