In this Edition:
DOLLAR WEAKNESS CHANGES THE CURRENCY BACKDROP FOR AFRICAN INVESTORS
The Treasury buyback surprise pushed the dollar lower, but the benefit to African portfolios will differ according to each market’s exchange-rate regime, inflation sensitivity and offshore exposure.
US TREASURY VOLATILITY RESHAPES DOLLAR AND RATE EXPECTATIONS
Fiscal concerns pushed long-term yields higher before expanded Treasury buybacks briefly supported bonds and weakened the dollar, keeping duration and currency risk central for investors.
EUROPE AND ASIA ABSORB HIGHER YIELDS UNEVENLY
European equities softened while Japan and China faced distinct growth and policy pressures, reinforcing the value of diversification across regions and sectors.
GOLD AND OIL KEEP FISCAL AND GEOPOLITICAL RISKS IN FOCUS
Gold benefited from fiscal and currency concerns while elevated oil prices preserved inflation risk, a combination with direct implications for both South African assets and global portfolios.
JACKSON HOLE RETURNS POLICY DIRECTION TO CENTRE STAGE
Forthcoming central-bank communication will help investors assess whether higher yields reflect a temporary risk premium or a more durable shift in the rate environment.
MARKET MOVES OF THE WEEK
Source: Infront (23 August 2026)
CHART OF THE WEEK
Source: Bloomberg (22 August 2026)
The dollar is trading at a three-month low and on track for its worst week of August, after the Treasury’s surprise mid-week move to at least double its pace of longer-dated bond repurchases. The announcement triggered the currency’s worst single day in months, pushing it below its 200-day moving average. Treasuries initially rallied but have since given back most of that move, while gold and precious metals continue to climb, reviving talk of a “debasement trade” as investors favour hard assets over sovereign paper.
For African investors, this week’s global market moves matter less as a single headline and more through the channels by which they reach local economies: currencies, inflation, interest rates and commodity prices. The softer US dollar and stronger gold price are supportive in parts of the region, while higher oil and still-elevated global yields create a more mixed picture for import costs, funding conditions and offshore portfolio returns.
Regional policy settings remain divergent
Across Carrick Africa’s core markets, the monetary and inflation backdrop remains notably varied. Nigeria’s central bank retained its Monetary Policy Rate at 26.5% in July, while the National Bureau of Statistics reports headline inflation at 15.43%. Zambia’s July inflation rate was 6.5%. Namibia held its repo rate at 6.75% on 12 August, explicitly noting the need to safeguard the Namibian dollar’s peg to the South African rand. Zimbabwe reported ZiG inflation of 3.2% year-on-year in July, with the Reserve Bank highlighting seven consecutive months of single-digit inflation. For investors across the region, these differences reinforce why moves in the US dollar, global yields, energy and commodity prices transmit unevenly through local currencies, inflation and portfolio returns.
South Africa also offered a useful regional reference point. Inflation eased to 4.3% year-on-year in July, the rand strengthened through R16.00 to the dollar and the JSE All Share gained more than 3%, led by resource and precious-metals counters. For neighbouring markets and investors with South African exposure, the combination of a softer dollar and stronger gold prices was supportive, although renewed oil pressure remains a potential inflation risk.
US Treasury volatility reshapes dollar and rate expectations
US equities closed the last week on a firmer note, with Friday’s session pausing a run of losses after data showed business activity expanding at its fastest pace in more than four years. The S&P 500 added 0.4%, the Nasdaq 100 rose 0.3%, and the Dow gained 518 points on the day. That relief came too late to rescue the week, however, as elevated Treasury yields, renewed US-Iran tensions, higher oil prices and weakness in semiconductor and AI-related names weighed broadly on sentiment. Mixed retail earnings added to the cautious tone. Over the last week, the Nasdaq Composite shed 2.05%, and the S&P 500 lost 1.43%, while the Dow held up comparatively well, down 0.85%.
Fixed income remained the dominant story. Long-term Treasury yields pushed higher early in the last week, with the 30-year touching its highest level since 2007, as investors grappled with a deteriorating US fiscal outlook and heavy government and corporate issuance. Rising oil prices on the back of renewed US-Iran tensions added a further inflationary layer. The Treasury’s mid-week announcement that it would at least double the size of its planned long-term debt buybacks sparked a rally that pulled 30-year yields down by roughly 8 basis points and weighed on the dollar. Still, much of that move unwound later last week as investors questioned whether the buyback programme goes far enough to offset the structural pressures on long-dated bonds.
Minutes from the Fed’s July meeting showed participants generally expecting inflation to moderate through the remainder of the year, though they flagged that the outlook remains highly uncertain with risks skewed to the upside, and that further policy tightening would likely be needed should inflation fail to decline.
On trade, the US imposed 50% tariffs on a tranche of Canadian goods just after midnight on Saturday, after the two countries failed to reach a deal. The measures cover around $20 billion of exports, including niche categories such as wooden ice hockey sticks, which represent just over 5% of Canada’s exports to the US, and are unlikely to prove a material economic shock to either side.
Europe and Asia absorb higher yields unevenly
European markets were not spared the global bond sell-off, with the STOXX Europe 50 down 1.18% for the last week as investors weighed inflationary pressure and uncertainty over a lasting US-Iran peace deal. The UK’s FTSE 100 bucked the trend, climbing 0.62%, even as labour market data disappointed: payrolled employment fell 13,000 in July, a sixth straight monthly decline, while unemployment held at 4.9%, slightly above the 4.8% expected.
Japan saw the sharpest regional drawdown, with the Nikkei 225 falling 3.93% as renewed Middle East risk, higher oil prices and rising yields drove a broad risk-off move, hitting technology and semiconductor names particularly hard. The yen stayed historically weak around JPY 159 to the dollar. Second-quarter GDP growth disappointed at an annualised 1.1%, well short of the 2.0% consensus and down from a revised 1.9% in Q1, with weak capital expenditure and softer consumer spending offsetting resilient exports. Inflation data added to the case for a near-term Bank of Japan hike, with core CPI up 1.8% year-on-year in July, in line with expectations and up from 1.6% in June.
Chinese equities were mixed, with Hong Kong outperforming the mainland. July activity data showed a broad-based slowdown: industrial output grew 4.5% year-on-year, down from 5.3% in June and below expectations despite continued strength in high-tech production, while retail sales growth slowed to 0.6% from 1%, underscoring persistently soft domestic demand. The Shanghai Composite ended the last week 0.56% lower in local currency terms.
Gold and oil keep fiscal and geopolitical risks in focus
In commodities, Brent crude held little change near $94 a barrel on Friday as markets weighed signs that Iran may be seeking a resolution to the conflict, even as this followed a more than 6% rise in oil prices for a second consecutive week. Iranian President Masoud Pezeshkian signalled a preference for ending the war from a position of strength, framing the existing memorandum with Washington as an Iranian win, comments that offered some relief after US Treasury Secretary Scott Bessent warned of the toughest sanctions yet on Tehran. Gold extended its rally to around 5% over the last week, climbing above $4,600 an ounce, its highest level since mid-May, supported by renewed concern over US fiscal sustainability following the Treasury’s expanded long-dated debt purchases, which pushed both yields and the dollar lower.
Jackson Hole returns policy direction to centre stage
This week, interest rates and the sovereign yield outlook will remain front and centre as markets weigh elevated energy prices, widening deficits and heavy corporate credit issuance. The Fed’s Jackson Hole Symposium will be the focal point, with FOMC speeches likely to set the tone on the path for monetary policy and balance sheet duration. Elsewhere, the ECB releases its meeting accounts, Germany publishes consumer and business confidence data, and Spain and France report CPI prints, while Japan releases consumer confidence and unemployment data.
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