Rand strengthens despite weak manufacturing data

 The South African rand strengthened on Monday, supported by a softer US dollar and despite the release of mixed domestic data. By 12h51 GMT, the rand was trading at 17.59 to the dollar, up approximately 0.30% from Friday’s close. A survey released the same day showed that South African manufacturing sentiment declined in August, following a brief improvement in July. Activity remained subdued, with both domestic and export demand continuing to lag, according to the latest Purchasing Managers’ Index (PMI).

On the Johannesburg Stock Exchange, the Top-40 index edged up by 0.50%, reflecting cautious optimism in local equities. Meanwhile, South Africa’s benchmark 2035 government bond also firmed, with the yield dipping one basis point to 9.595%.

Across the Eurozone, stock markets closed slightly higher on the first trading day of September, as investors weighed the global interest rate outlook and ongoing geopolitical risks in Europe. The Eurozone’s STOXX index rose by 0.30% to 5 365, while the broader pan-European STOXX 600 index gained 0.20% to 551. Defence stocks led the gains after European Commission President Ursula von der Leyen announced that the EU is preparing “pretty precise plans” for potential military deployments to Ukraine as part of post-war security guarantees, with full backing from the United States.

In London, the FTSE 100 trimmed earlier gains to finish just above the flatline at 9 196. Strength in defence and precious metals stocks helped offset declines in utilities. Market participants are watching corporate earnings updates and awaiting key US economic data, particularly labour market figures. Domestically, the Bank of England's latest money and credit data indicated robust credit flows and rising mortgage approvals. However, a separate PMI report confirmed the ongoing downturn in UK manufacturing activity during August.

In Asia, Japanese markets extended losses. The Nikkei 225 fell by 1.24% to close at 42 189, while the broader Topix Index declined 0.39% to 3 063. Losses mirrored a sell-off on Wall Street, triggered by higher-than-expected US inflation figures, which raised concerns over persistent price pressures. Sentiment was further dampened by a US federal appeals court ruling declaring former President Donald Trump’s reciprocal tariffs illegal, with the administration given until 14 October to appeal to the Supreme Court.

Conversely, Chinese equities ended higher for a third consecutive session. The Shanghai Composite rose by 0.46% to 3 876, and the Shenzhen Component climbed 1.05% to 12 829, after a private survey revealed that manufacturing activity unexpectedly returned to growth in August. The data pointed to stronger new orders and export demand, defying forecasts of continued weakness.

In the United States, the S&P 500 (US500) closed at 6 468 points on 1 September 2025, up 0.12% from the previous session, as markets digested the latest inflation data and its implications for interest rate policy.

Commodity markets also saw movement. WTI crude oil futures climbed above $64 per barrel on Monday, rebounding from earlier losses amid fears of supply disruptions linked to the ongoing Russia-Ukraine conflict. Meanwhile, gold prices surged past $3 470 per ounce, nearing a record high, fuelled by uncertainty surrounding Trump-era tariffs and growing expectations of a US interest rate cut.