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South African Markets React to US Non-Farm Payrolls, Federal Reserve Rate Cuts Expected

Strategic Insights

— 2 min read

The JSE All Share index and the Rand reacted positively to the release of the US non-Farm payrolls, with the All Share index recovering by 0.9% on Friday and closing the week flat, despite a 300-point drop. The Rand also strengthened, appreciating by 20 cents to R17.56/$, while the price of Gold reached a new record high at $3,600 per ounce. The market expectation is that the Federal Reserve will cut its Bank rate by 0.25% at its next meeting, with Bank of America altering its forecast to two downward adjustments this year and three more in 2026.

Key Takeaways:

  • The JSE All Share index recovered by 0.9% on Friday, ending the week flat with a 300-point drop.
  • The Rand appreciated by 20 cents to R17.56/$, still 10 cents weaker than the previous strong close, but 100 cents stronger than a year ago.
  • The price of Gold reached a new record high at $3,600 per ounce on Friday.
  • Bank of America altered its forecast to two downward adjustments in interest rates this year and three more in 2026.
  • The Federal Reserve is expected to cut its Bank rate by 0.25% at its next meeting on 16-17 September.
  • The stronger Rand and lower oil price suggest a potential decrease in diesel prices in South Africa at the beginning of October.
  • The Reserve Bank's Monetary Policy Committee may follow the Federal Reserve's lead and cut interest rates at its next meeting on 16-18 September.

Statistics:

  • The JSE All Share index is 20.7% up for the year.
  • The US created only 22,000 new jobs in August 2025, much lower than the expected increase of 72,000.
  • The US unemployment rate increased to 4.3% from 4.2% in August 2025.
  • The Personal Consumption Expenditure (PCE) price index showed a strong increase of 2.7% in July.
  • The Brent oil price closed at $65.64 last week, $2 per barrel lower than $67.64 a week ago.
  • The S&P 500 closed 0.3% lower on Friday, but gained 0.32% over the week.
  • The Rand appreciated by 20 cents on Friday, reaching R17.56/$.
  • Gold prices reached a new record high at $3,600 per ounce.

Sources:

  • Chris Harmse, consulting economist of Sequoia Capital Management and senior lecturer at Stadio Higher Education.
  • Bank of America.
  • Federal Reserve.
  • Statistics South Africa.
  • Reserve Bank of South Africa.
  • IOL.
  • Independent Media.

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