RFA Breakfast Paper - June 25, 2026
South Africa Producer Inflation Surges to 7.8% on Fuel Cost Shock
Producer price inflation in South Africa accelerated sharply to 7.8% year-on-year in May 2026, up from 4.8% in April, marking the third consecutive monthly increase and the highest reading since April 2023. The increase was driven primarily by a 22.1% surge in prices for coke, petroleum, chemical, rubber, and plastic products, reflecting the pass-through of higher fuel costs, with diesel prices jumping 66.7% and petrol prices rising 28.1%. Additional upward pressure came from paper and printed products (8.7%), food, beverages and tobacco (2.1%), and metals, machinery and equipment (2.9%), indicating that higher input costs were becoming more widespread across the manufacturing sector. On a monthly basis, producer prices increased 2.6%, following a 3.0% rise in April, suggesting that while the pace of monthly cost increases moderated slightly, producer inflation remained elevated. The latest data highlight the continued impact of earlier fuel price shocks on production costs and reinforce expectations that upstream inflationary pressures could continue to feed into consumer prices, supporting the South African Reserve Bank's cautious monetary policy stance.
Stronger GDP growth fails to lift markets as consumer stocks weigh on sentiment
U.S. equities closed modestly lower on Thursday as gains in industrials and healthcare were outweighed by weakness in consumer discretionary and consumer staples stocks. Investors remained cautious despite easing Treasury yields, with the 10-year Treasury yield falling to 4.39%. WTI crude oil advanced on renewed tensions in the Strait of Hormuz but remained well below recent highs, while the U.S. dollar weakened slightly against major currencies. Economic data provided a brighter outlook for growth, with first-quarter GDP revised higher to an annualized 2.1% from 1.6%, supported by stronger business investment and a smaller drag from imports. However, consumer spending was revised lower, raising concerns that household demand may be slowing and contributing to the pullback in consumer-related stocks. Overall, the data suggests the economy entered the second quarter with stronger momentum, although investors remain watchful of geopolitical risks and signs of moderating consumer activity.
NGX extends losing streak as broad-based selling pressure weighs on investor sentiment
The Nigerian equity market extended its losing streak, with key performance indicators closing lower as sustained profit-taking continued to weigh on investor sentiment. Selling pressure across mid-cap and blue-chip stocks drove losses in all major sectors, with the Oil & Gas and Insurance indices leading the decline. As a result, the NGX All-Share Index shed 1,493.71 points, or 0.64%, to close at 233,580.83, while market capitalization declined by ₦958.50 billion, also down 0.64%, to settle at ₦149.89 trillion. The broad-based weakness underscores investors' cautious stance as they continue to lock in recent gains amid the absence of strong positive market catalysts. Market activity also softened during the session, reflecting weaker participation from investors. Total trading volume fell by 19.35%, while the value of transactions declined by 8.19% compared with the previous session. Investors exchanged approximately 393.65 million shares worth ₦19.21 billion across 45,813 deals. The combination of declining prices and lower trading activity suggests that bearish sentiment remains firmly in control, with investors adopting a more defensive approach while awaiting fresh catalysts that could improve market confidence and reverse the current downward trend.
