RFA Breakfast Paper - July 30, 2026
South Africa's Producer Inflation Eases Slightly in June
Producer price inflation in South Africa eased to 7.5% year-on-year in June 2026, down from an over three-year high of 7.8% in May, indicating a modest moderation in upstream price pressures. The slowdown was primarily driven by softer inflation in food, beverages and tobacco (1.3% vs. 2.1%), paper and printed products (8.5% vs. 8.7%), electrical machinery, communications and metering equipment (6.2% vs. 6.9%), transport equipment (0.6% vs. 0.7%), and furniture (4.6% vs. 8.2%). However, price pressures intensified for textiles, clothing and footwear (6.9% vs. 5.2%), non-metallic mineral products (11.5% vs. 10.5%), and metals, machinery, equipment and computing equipment (3.2% vs. 2.9%), while inflation for coke, petroleum, chemical, rubber and plastic products remained elevated at 22.0%, reflecting the continued impact of higher energy costs. On a monthly basis, producer prices declined 0.1%, reversing the 2.6% increase recorded in May. Overall, the latest data suggest that although producer price pressures have begun to ease from recent highs, elevated energy-related costs continue to pose upside risks to inflation, with the persistence of high input prices likely to keep pressure on businesses and consumer prices in the near term.
U.S. Equity Markets Rally as Softer Inflation Data Boosts Investor Sentiment
U.S. equity markets rallied on Thursday after a cooler-than-expected Personal Consumption Expenditures (PCE) inflation report reinforced expectations that inflationary pressures continue to ease. The softer inflation reading helped calm concerns following the Federal Reserve's decision to leave interest rates unchanged, supporting a decline in Treasury yields and improving investor appetite for risk assets. Although renewed tensions in the Middle East briefly pushed WTI crude oil above $85 per barrel, oil prices later retreated below $84, providing additional relief to markets. Corporate earnings remained a key focus, with Microsoft reporting strong quarterly results driven by continued growth in its cloud business and AI-related revenue, while Meta disappointed investors as elevated AI spending weighed on free cash flow. Beyond technology, the ongoing broadening of market leadership remained evident, as value and cyclical sectors continued to attract investor interest alongside selective buying in beaten-down areas of the technology sector.
NGX Extends Decline as Profit-Taking Persists Amid Share Listing
The Nigerian equity market closed lower for another session as sustained profit-taking in mid-cap and blue-chip stocks continued to weigh on investor sentiment. The NGX All-Share Index (ASI) declined by 1,617.91 basis points, or 0.66%, to close at 245,362.26, while market capitalization fell by ₦1.01 trillion, or 0.63%, to ₦158.34 trillion. Although both indicators declined, Market Capitalization recorded a slightly smaller loss than the NGX-ASI due to the additional listing of 15 billion ordinary shares by Fortis Global Insurance Plc following its ₦12.0 billion debt-to-equity conversion. Despite this adjustment, selling pressure remained broad-based as investors continued to take profits in mid-cap and blue-chip stocks across major market sectors. Trading activity strengthened considerably during the session, with total trading volume surging by 177.01% to 2.10 billion shares, while the value of transactions jumped 583.04% to ₦230.83 billion across 48,231 deals. The sharp increase in turnover reflected heightened market participation, supported by the additional share listing and active portfolio repositioning. However, the continued decline in the benchmark index suggests that selling pressure remained dominant despite the significant increase in trading activity.
