Carla da Waal

Global markets have remained volatile, driven by policy uncertainty, geopolitical risks, and uneven growth signals. The US government shutdown and patchy inflation data have complicated the Federal Reserve’s policy path, even as markets anticipate further rate cuts and an end to quantitative tightening. Fiscal stimulus in major economies has cushioned tariff impacts, but China’s economic indicators remain weak, while commodity markets are mixed; gold rallied on uncertainty, oil softened.

Locally, improved sentiment, moderating inflation and structural reforms have supported capital inflows and a stronger rand. Inflation expectations near the 3% target should allow gradual monetary easing. Coupled with a stronger exchange rate, this should help alleviate consumer pressures and encourage increased credit uptake, spending and investment. Higher commodity prices and operational efficiencies underpin a healthier fiscal base and industrial growth.

Volatility and policy divergence are likely to persist into 2026. While we aim to look past short-term noise and remain focused on long-term outcomes, heightened uncertainty brings increased volatility. We maintain conviction in our strategic asset allocation as an important anchor to achieve those outcomes but also value the role of cash both locally and offshore as a diversification tool and for the flexibility it provides to take advantage of market dislocations.