Rates stay high, SA growth stays low

Overnight global mood

Wall Street closed Friday in holding pattern, waiting for fresh inflation signals before the Fed makes its next move on rates. Europe and Asia followed suit with cautious trading. The global backdrop remains tight: higher rates are here to stay, central banks are hawkish, and emerging markets like ours are caught in the squeeze.

Today's big stories

• SARB warns fuel shock is 'massive and persistent'. The Reserve Bank's latest Monetary Policy Review signals that rate cuts are not imminent, and inflation remains the villain of the piece. Expect financials and rate-sensitive stocks to price this in carefully. Read more.
• SA's missing R3.6 trillion GDP haunts the market. Had South Africa grown at its pre-2008 average rate, the economy would be R11.6 trillion today instead of R8 trillion. That's not just economics; it's the investor narrative that sours every rally. Read more.

Sector watch

Financials will be under scrutiny as the rate environment hardens; higher lending rates are margin-friendly for banks, but demand-destroying for borrowers. Industrials face the squeeze from weak local demand and higher funding costs. Expect defensive plays and yield stocks to attract flows on a Monday like this.

One thing to watch

The rand's opening mood against the dollar. A weaker rand lifts exporters and inflation fears; a stronger rand suggests risk appetite is fragile. Watch for any sign that capital is fleeing, not flowing into JSE equities.