RFA Breakfast Paper - July 3, 2026
South Africa's Private Sector Returns to Growth Despite Weak Demand
The S&P Global PMI for South Africa rose to 50.5 in June 2026 from 49.6 in May, signaling a return to marginal expansion in private sector activity after the previous month's contraction. Despite the improvement, output and new orders declined for a second consecutive month, reflecting subdued domestic demand as firms continued to report constrained client spending, heightened economic uncertainty, and elevated price pressures. The services sector was the only broad
category to record growth in new business, highlighting uneven performance across the economy. Business confidence weakened further, falling to its lowest level since July 2021, as concerns over domestic political uncertainty and the lingering effects of the Middle East conflict weighed on sentiment. On the cost front, input price inflation eased sharply from May's 46-month high, while output price inflation also moderated, although both remained elevated due to higher fuel and shipping costs. Meanwhile, firms continued to expand employment by hiring both permanent and temporary workers to boost capacity, even as supplier delivery times lengthened further because of ongoing disruptions to imported shipments.
U.S. Markets Return from Holiday Break with Focus on Key Economic Data
U.S. markets were closed on Friday in observance of the Fourth of July holiday, with investors turning their attention to a busy week of economic releases and monetary policy updates. Meanwhile, WTI crude oil edged lower after OPEC+ announced another modest increase in oil production for August, reinforcing expectations of ample global supply and supporting the outlook for easing inflation pressures. Investor focus this week will center on key economic data that
could influence expectations for the Federal Reserve's policy path. Monday's ISM Non-Manufacturing PMI, ISM Services Prices Index, and S&P Global Services PMI will provide fresh insight into the strength of the U.S. services sector and underlying price pressures. Markets will then look to the release of the Federal Reserve's June meeting minutes on Wednesday for clues on policymakers' interest rate outlook, before Thursday's Initial Jobless Claims report offers
another assessment of labor market conditions. These releases are expected to play a key role in shaping investor sentiment and Treasury yield movements throughout the week.
NGX Rebounds Strongly but Ends the Week in Negative Territory
The Nigerian equity market closed the week on a strong note as renewed buying interest and bargain hunting in mid-cap and blue-chip stocks lifted investor sentiment. The broad-based recovery pushed the NGX All-Share Index (ASI) up by 4,918.37 basis points, or 2.19%, to close at 229,240.34, while market capitalization gained ₦3.16 trillion, also rising 2.19%, to settle at ₦147.10 trillion. Despite Friday's sharp rebound, the gains were not enough to offset losses
recorded earlier in the week, leaving the NGX-ASI down 1.21% week-on-week and reducing investors' wealth by approximately ₦1.80 trillion. Trading activity, however, remained mixed as market participation eased. Total trading volume declined by 46.82% to 454.92 million shares, while the value of transactions slipped 2.86% to ₦27.61 billion across 48,214 deals. The strong finish suggests buying interest is gradually returning after recent weakness, although investors
are likely to remain selective as they assess market opportunities in the coming week.
