RFA Breakfast Paper - August 25, 2026
South Africa’s Leading Indicator Signals Worsening Growth Momentum
The composite leading business cycle indicator in South Africa declined 1.4% month-on-month in June 2026, accelerating from a 0.3% contraction in May and marking the third consecutive monthly decline, pointing to weakening economic momentum ahead. The deterioration was driven primarily by lower US dollar-denominated prices for key export commodities and slower six-month smoothed growth in real M1 money supply. Five of the seven available component indicators declined, more than offsetting gains in residential building plans approved and the six-month smoothed growth rate in job advertisements. Additional negative contributions came from fewer new passenger vehicle sales, a narrower spread between 10-year government bond yields and 91-day Treasury bills, and weaker leading indicators for South Africa’s major trading partners. Meanwhile, the coincident business cycle indicator fell 0.2% in May, suggesting that current economic activity also weakened, while the lagging indicator increased 0.9%. Overall, the latest data point to a continued deterioration in South Africa’s near-term growth outlook, with weaker external demand, softer domestic liquidity growth and declining consumer activity weighing on economic momentum.
U.S. Stocks Rise as Yields Retreat
U.S. equities advanced on Tuesday, with the S&P 500 up 0.32% to 7,677.28 and the Nasdaq Composite gaining 0.66% to 26,151.30 as a rally in semiconductor names led technology higher. Falling oil prices eased near-term inflation worries, pulling the 10-year Treasury yield down almost 10 basis points to about 4.64% and supporting rate-sensitive sectors. Moderna jumped more than 14% on positive cancer-vaccine data. Investors now look to Friday’s PCE inflation report and Fed Chair Warsh’s Jackson Hole address for policy signals.
NGX Falls for 11th Day on Bank Sell-Off
Nigerian equities extended their losing streak to an 11th straight session on Monday, the last trading day before Tuesday’s Eid-ul-Mawlid public holiday. The All-Share Index slipped 0.11% to 239,085.17 and the NGX 30 fell 0.48% to 8,763.20, trimming the year-to-date gain to about 53.6%. Losses were concentrated in financials: the Banking Index shed 0.63% to 2,458.04, led by Fidelity Bank’s 6.0% fall to ₦18.80 and declines in First HoldCo and UBA. Breadth stayed negative, with 31 decliners against 19 advancers, though Red Star Express and University Press each rose more than 9%. Turnover was ₦23.83 billion across 668.7 million shares.
