Global Markets Hit Record Highs......While Washington Targets the Fed (and Greenland)

Apologies for the delayed issue of this week's Review.

It was a week of records...

...and a reminder that markets often have a mind of their own.

While headlines screamed about Fed Chair Powell facing a DOJ investigation, Trump eyeing Greenland, and Iranian tensions sending oil on a 10% spike, the JSE quietly hit all-time highs...

...the S&P 500 flirted with 7,000...

...and Gold broke through $4,600 for the first time ever.

And the Rand? It strengthened.

Not dramatically – just 5.5 cents – but enough to push through R16.42/$ by Friday's close.

Another week of the local unit doing what it does best: following sentiment, not headlines (and another week where the conventional wisdom got it wrong).

And, not be left out, the lid was blown off the SA government's real agenda with the CRL Commission.

Let's dig into how it all played out...

Key Moments (12-16 Jan 2026)

Markets Hit New Highs: JSE All Share touched 121,284 (best ever, up 40% in 12 months), S&P 500 hit 6,994 intraday, Gold broke $4,600 for the first time

• Fed Chair Under Fire: DOJ investigation into Powell announced 

• US CPI Holds at 2.7%: December inflation in line, core at 2.6% – softer than expected

• Jobless Claims Plunge: Initial claims at 198K – much better than 215K expected, strongest in months

• BRICS Naval Drills: China-led exercises at Simon's Town draw US criticism – Iran ship controversy

• Trump Eyes Greenland: Denmark talks at White House yield "fundamental disagreement" – European military response

• CRL Chair Resigns: Rev Prof Musa Xulu quits, citing "predetermined agenda of State control of religion"

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Monday: Records Out the Gate

Monday opened at R16.4732/$ with thin trading after the weekend...

...but the real action was happening elsewhere.

The JSE came storming out of the blocks, building on last week's momentum as precious metals continued their remarkable run. Gold was already pushing toward $4,550, with platinum and palladium adding fuel to the fire for SA's resource-heavy index. 

By mid-session, the All Share had touched fresh record territory – a far cry from the doom-and-gloom narratives that dominated just twelve months ago.

The Rand tested weaker early, pushing up toward R16.50 as markets digested the weekend's geopolitical noise. Trump's Greenland comments were making waves (he wants to buy it for 'national and world security reasons', and won't take no for an answer)...

...while BRICS naval exercises at Simon's Town had US officials calling South Africa's hosting of Iranian ships "particularly unconscionable."

But the local unit found its feet mid-afternoon settling back toward R16.36/$ by the close...

...A solid 10-cent gain on the day, and a reminder that sentiment often trumps headlines.

Tuesday: Powell, Inflation, and a Market That Shrugged

Tuesday opened at R16.3635/$ and immediately faced the week's first major data test...

...US CPI.

The numbers landed at 8:30 AM New York time: headline inflation at 2.7% year-on-year, bang in line with expectations. But it was the core reading that got attention – 2.6%, a tick below the 2.7% consensus. The softest core inflation print since March 2021.

Markets breathed a sigh of relief. 

Fed rate cut expectations held steady (two cuts expected this year, probably starting June), and the dollar eased slightly. The Rand tested down toward R16.35 mid-session before settling.

But the real story was brewing behind the scenes.

Word leaked that the Department of Justice had served the Federal Reserve with grand jury subpoenas. 

The target? 

Fed Chair Jerome Powell himself, over building renovations at the Fed's headquarters.

Is this political pressure on the Fed? Almost certainly yes. Trump has been gunning for Powell since his first term, and the timing – right as the Fed is being stubborn on rate cuts – is hardly coincidental.

But here's the thing... the investigation centres on a $2.5 billion renovation that's ballooned from an original $1.9 billion estimate – a 32% cost overrun. The buildings haven't been touched since the 1930s, and Powell insists there's nothing lavish about it. 

Maybe... 

...but $2.5 billion is $2.5 billion!

And the Fed isn't exactly known for fiscal restraint when it comes to its own operations.

Of course, the legacy media has rushed to Powell's defence (as expected). But don't dismiss the questions entirely just because you don't like who's asking them -- there may be more to this than meets the eye.

Markets took it in stride. The Rand closed Tuesday at R16.3742/$ – essentially flat, holding Monday's gains.

Wednesday: Central Bankers Circle the Wagons  

Wednesday opened at R16.3742/$ and quickly saw the international fallout from the Powell situation...

...as the world's central bankers issued a joint statement of solidarity.

ECB President Christine Lagarde, BoE Governor Andrew Bailey, and notably, SARB Governor Lesetja Kganyago, joined a rare public declaration affirming that "the independence of central banks is a cornerstone of price, financial and economic stability." It was an extraordinary moment – central bankers don't usually do public political statements about other central banks...

...maybe the global fiat system controllers – central bankers and their shareholders – are starting to feel threatened?

Back to the data: US PPI landed hotter than expected at 3.0% year-on-year (consensus was 2.7%), though the core reading came in flat month-on-month. Retail sales beat expectations at +0.6% (vs +0.4% forecast).

Existing home sales surged to 4.35 million (above the 4.21 million expected).

Strong US data, but not strong enough to shift Fed expectations materially.

The Rand pushed and pulled through a 10-cent range, testing up to R16.44 before settling back. Gold, meanwhile, broke through 4,600 for the first time ever...

...safe−haven demand meeting dollar uncertainty.

By the close, we were at R16.3885 – a modest 1.4-cent weakening on the day, but still well within the week's range.

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And in other news...

Iran: From Crisis to Calm (Sort Of) 

The Iranian situation took markets on quite a ride this week...

...with oil spiking 10% before giving most of it back.

The backdrop: protests that began in late December over currency collapse have evolved into a broader anti-government movement. Over 3,400 reported dead in the crackdown (according to Iran Human Rights NGO). Trump cancelled all meetings with Iranian officials on Monday, promised protesters that "help is on the way," and moved a carrier strike group toward the region.

Oil surged. Brent touched above $67/barrel by Wednesday – its highest since late November.

But then Thursday brought a shift. Iran announced a pause on protester executions. Trump softened his rhetoric. By Friday, oil had given back nearly 5% – the sharpest single-day drop since October.

For EM currencies like the Rand, the Iran volatility was largely a sideshow. The real question is what a post-crisis Iran looks like – and whether sanctions relief or regime change reshapes oil markets more fundamentally. 

For now, markets are taking a wait-and-see approach.

Greenland: Trump Wants It, Denmark Says No

In one of the stranger geopolitical dramas of the young year...

...Trump doubled down on his desire to acquire Greenland.

Danish and Greenlandic foreign ministers met with VP Vance and Secretary Rubio at the White House on Tuesday. 

The outcome? A "fundamental disagreement" and the creation of a working group – diplomatic speak for "we're miles apart."

Denmark's response was measured but firm. France, Sweden, Germany, and Norway announced they'd deploy military reconnaissance to Nuuk. The Danish PM warned that a military seizure would mean "the end of NATO."

Markets have largely shrugged this off as Trumpian posturing – though the strategic implications of Arctic control aren't lost on analysts watching China and Russia's northern ambitions...

...which Europe have little chance of stopping.

Again, perhaps more than meets the eye here - some more 4D chess, maybe?

Stocks Everywhere at Records

It wasn't just the JSE having a party this week...

...global equities continued their remarkable run.

The S&P 500 touched 6,994 intraday on Friday – tantalisingly close to the psychologically significant 7,000 level. The Dow crossed 49,000 earlier in the week and held above it. 

Small caps (Russell 2000) delivered their strongest January start since 2021.

What's driving it? 

For one, AI enthusiasm continues (Nvidia approaching $5 trillion market cap after their CES announcements), bank earnings came in strong (Goldman up 4.6%, Morgan Stanley up 5.8%), and the "Goldilocks" narrative persists – growth solid enough to support earnings, inflation tame enough to keep the Fed on a cutting path.

Back home, the JSE's 40% gain over twelve months reflects SA-specific tailwinds: record foreign bond inflows in 2025, first credit upgrade in 20 years (S&P in November), 231 consecutive days without load shedding, and a precious metals boom that's been music to miners' ears.

BRICS in Simon's Town

South Africa found itself in diplomatic crosshairs this week...

...hosting "Will for Peace 2026" naval exercises at Simon's Town.

The China-led drills – featuring Russian and Iranian vessels – drew sharp criticism from Washington. The US Embassy stated that South Africa "can't lecture the world while cozying up to Iran." 

Senate Foreign Relations Chair Jim Risch called SA a "US adversary" and demanded "stronger action."

The exercises concluded Friday without major incident, though the Iranian ship controversy (the Naghdi docking at Cape Town) added fuel to already-strained US-SA relations. With AGOA extension having just passed the House (340-54 on Monday), the Senate vote becomes even more politically charged.

A concerning situation, with SA doubling down on who they regard as their friends.

But that was not all...

CRL Committee Chair Resigns: "State Control of Religion"

In a bombshell resignation that's lifting the lid on government overreach...

...Reverend Professor Musa Xulu quit as Chairman of the CRL Rights Commission's Section 22 Committee on Thursday.

His words were damning: "I can no longer serve as Chair of a Committee ... the existence of which is being used as a front to disguise a predetermined agenda of State control of religion, driven in part by personal hostility toward particular Christian faith and traditions."

Let that sink in...

"...a predetermined agenda of State control of religion."

This is one of the outstanding pillars being quietly put in place – control of religious institutions by the state. 

And it doesn't exist in isolation. 

Various pieces of legislation have already been signed into law that involve state interference and control of business and employment (BBBEE, Employment Equity), free speech (hate speech laws), education (BELA Act), health (NHI), and property rights (Expropriation Act).

Control of religion is the next frontier. 

It's a pattern with a name: it's what happens under communist systems. 

Control religion...control the narrative...control the people.

Freedom of Religion South Africa (FOR SA) has called for an urgent, independent inquiry and the suspension of the ongoing regulatory framework process. They noted: "Actions matter more than rhetoric."

One to watch very closely.

To get back to the Rand...

Thursday: Jobs Data Delivers 💪

Thursday opened at R16.3885/$ and quickly became about US labour market strength...

...as jobless claims came in much better than expected.

Initial claims dropped to 198,000 – well below the 215,000 consensus. It's the lowest reading in months, and a clear signal that despite Fed tightening and trade uncertainty, America's job market remains resilient.

Adding to the positive data: the NY Empire State Manufacturing Index swung to +7.7 (from -3.7 prior – economists expected +1). Philadelphia Fed manufacturing hit +12.6 (vs -2 expected). After months of contraction, US manufacturing is showing signs of life.

Initially, the Rand tested weaker on the strong US data...

...pushing briefly toward R16.42 as dollar bulls took a swing. But the move didn't stick.

Instead, the local unit rallied sharply into the close, testing down to R16.3092 – the week's best level – before settling at R16.3156/$. A 7.3-cent strengthening on the day (yes, you read that right).

Strong US jobs data, and the Rand gained ground? Pretty revealing, isn't it?! Once again, sentiment trumped fundamentals – a reminder that what "should" happen and what actually happens in markets are often two very different things.

Friday: Approaching the Finish Line

Friday opened at R16.3156/$ – the week's strongest level – and immediately faced profit-taking pressure...

...as traders squared positions ahead of the weekend.

Industrial production beat expectations (+0.4% vs +0.1% forecast), but the NAHB Housing Market Index disappointed at 37 (below the 40 expected). Mixed signals, but nothing to shift the narrative dramatically.

The Rand drifted weaker through the session, testing up toward R16.47 at one point – nearly retracing the entire week's gains. But it found support and pulled back, closing around R16.42/$.

The net result? A modest 5.5-cent gain for the week (0.34% Rand strengthening). 

Not dramatic, but another week in the green – and another week where sentiment beat headlines.

Volatility & Risk Analysis

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Here's how the volatility played out:

• Open to Close Move: The week opened at R16.4732/$ Monday morning and closed Friday afternoon at R16.4178/$ – a 5.5c (0.34%) strengthening.

• Average Daily Range: ~13c (0.79%) Risk per $1 Million Exposure: R130,000

• Maximum Single-Day Range: ~16c (0.97%) on Friday Risk per $1 Million Exposure: R160,000

• Weekly Range: 19c (R16.3092 low to R16.4987 high) – 1.15% swing Risk per $1 Million Exposure: R190,000
  

For importers, the R16.30-R16.35 zone offered attractive entry points mid-week – levels we haven't seen consistently since early 2023. (Were you positioned to take advantage?) 

For exporters, the question remains: for how much longer is this Rand strength durable, or a setup for a reversal?

The Week Ahead (12-16 January 2026)

SA: CPI (December) due Wednesday, Mining Production (November)

US: Martin Luther King Jr. Day Monday (markets closed), Existing Home Sales, Leading Indicators, Fed speakers

Global: World Economic Forum Davos (Jan 19-23), ECB commentary, UK labour data

What to Watch: The Davos circus kicks off Monday with Trump expected to address the forum mid-week his first in-person appearance since 2020. Expect pronouncements on tariffs, Greenland, and probably a few surprises. 

Back home, December CPI on Wednesday will inform SARB expectations ahead of the 29 January MPC decision. The benign inflation picture (3.5% in November) should continue, supporting the case for further rate cuts.

To your success~

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Disclaimer: The content of this Weekly Rand Review has been prepared by and constitutes the opinion of Dynamic Outcomes, a division of Dynamic Forex Solutions LLC (DFS); it is solely for informational and educational purposes and is not to be taken as advice, or an offer or solicitation to buy or sell the securities or financial products mentioned in the content nor a recommendation to participate in any particular trading strategy. No past performances of any strategy or forecasts are a guarantee of future performance; trading in financial markets involves substantial risk, and you need to do your own due diligence in managing this risk. While every care has been taken in ensuring that the content gleaned from third parties is from reliable sources, no responsibility or liability will be accepted by BeztForex or DFS as to the accuracy of the information contained here, which may be subject to correction or amendment at any time after publication.