Week in Review: US and Japan Reach Trade Agreement

At its 24 July meeting, the European Central Bank held its deposit rate steady at 2.0% after eight consecutive cuts since June 2024. ECB President Christine Lagarde highlighted persistent global uncertainties, particularly trade tensions, as justification for a cautious “wait-and-see” stance. Meanwhile, Eurozone business activity improved modestly, with the HCOB flash composite PMI rising to 51.0 in July from 50.6, supported by gains in both services and manufacturing.

In the UK, retail sales rose 0.9% in June, rebounding from a steep May decline. Despite warmer weather, consumer demand remained subdued. The July flash composite PMI also edged down to 51.0 from 52.0 as services weakened and employment indicators signalled labour market strain, pressured by higher payroll taxes and ongoing trade frictions.


Asian markets posted strong gains. Japan’s Nikkei 225 rallied 4.11%, buoyed by news of a trade agreement with the U.S., which helped offset concerns around political uncertainty following the ruling coalition’s loss of its upper house majority. Chinese equities also advanced, with the Shanghai Composite up 1.67% and the Hang Seng climbing 2.22%, as markets looked ahead to another round of U.S.-China trade talks.

Market Moves of the Week

Meanwhile, the U.S. House Foreign Affairs Committee advanced the “U.S.–South Africa Bilateral Relations Review Act,” which could sanction South African officials over concerns about the country’s foreign policy, including ties with China and Russia. President Cyril Ramaphosa acknowledged the bill, expressing hope for diplomacy to prevail and stating that it will not change South Africa’s approach to its relationship with the United States.



The JSE All Share Index rose modestly by 0.23% over the week, buoyed primarily by a 1.51% gain in the resources sector. Industrials (+0.81%) and property (+0.33%) also contributed positively, while the financial sector was the sole laggard, slipping 1.46%. By Friday’s close, the rand weakened slightly by 0.17% against the U.S. dollar, trading at R17.76, pressured by a stronger dollar and declining gold prices.

Chart of the Week:

Credits: Strategiq