Oil prices and the Rand reached worrying levels last week at their worst since the Iran attack.
Image: TVBRICS
The geo-political uncertainty in the Strait of Hormuz and the vulnerable ceasefire between the US and Iran, pushed both the Brent oil price as well as the Rand exchange rate to their worst levels since 28 February (the day of the first attacks on Iran).
The Rand traded last Wednesday at R16.85/$, up from R16.50 last Monday and R16.31/$ the previous Friday, losing 50 cents within 7 trading days.
The currency followed in the now vested relationship with the oil price.
The Brent oil price increased sharply last week and reached R127/$ per barrel in intra trade last Thursday, a shocking $22 higher than the $107 per barrel the previous Friday.
The immense volatility in both dominant variables that overshadow all financial markets continued Friday.
Brent oil price recovered quickly to fall by more than $8 since last Wednesday peak on $108.83.
This is only $3.00 per ounce higher than the previous Friday’s close and flat for the month given the opening price of $109 on 2 April 2026.
The Rand followed the same tendency, and it recovered strongly last Friday to close on R16.60/$ or 25 cents stronger than last Wednesday's peak.
For the month of April, the Rand appreciated by 30 cents from R16.92/$ on 1 April 2026.
The stronger Rand and the sideways movement in the Brent oil price helped towards a decrease in the under-recovering of fuel prices during April.
At 27 March, the day after the announcement of the strong increase in fuel prices of R3.02 for petrol and R7.37 per litre (Despite the lowering of R3.00 per litre in the fuel levy by the Minister of Finance), under-recovering already was R17.00 per litre for diesel and R7.35 per litre for petrol.
It improved strongly over the month and on Wednesday 29 April the under-recovering for petrol was R2.03 per litre for petrol and R4.96/litrefor diesel.
The Minister of Finance Enoch Godongwana announced that the government will extend the lower fuel levy of R3.00 per litre for June and lower the fuel levy on diesel by a further 93 cents per litre.
This will prevent a further sharp increase of around R4.00 per litre for petrol and R7.00 litrefor diesel this coming Wednesday.
This extension of the lower fuel levy will cost the government R17 billion, but the Minister indicated that this cost will be financed by the better-than-expected tax income that was received by SARS.
On the JSE share prices, after a week of strong recovery during the middle of April, tumbled in the last two weeks, illustrating the most volatile movements on the equity market over the last year.
The ALSI closed on Friday at 115,181. This is 6 068 or 5.0% down after the initial strong recovery at the beginning of the month to 121 249, or an improvement of 4.2% from the 116 112 on 1 April 2026.
Ending last week only 1.1% in the red.
Precious metals prices also moved volatile with the prices for gold and platinum ended the month flat with gold at R4 161 per ounce against $4 667 on 2 April and platinum closing on $2 000 against $1 999 at the beginning of April.
The JSE precious metals and mining index, however, traded down by 4.8% in April.
On Wall Street, the Dow Jones industrial index had a positive month and increased by 6.44% in April and gained 055% last week.
The S&P500 index traded 0.9$ higher last week and gained a massive 9.8% last month, indicating that US companies are isolated from the events in the middle east and geo-political movements.
The MSCI world index followed the same pattern, increasing by 1.0% last week and 8.36% over the last month.
This coming week financial markets will once again nervously look at the ceasefire between the US and Iran and between Isreal and Lebanon.
On the economic front The US non-farm payrolls for April will be published on Friday.
The US economy created 178 000 new jobs in March, and it is expected that much less were created in April, around 73 000.
This may indicate to the Federal Reserve for their next meeting later in the month not to change interest rates at this stage.
South Africa and most other countries will release the latest manufacturing purchasing managers indices (PMI) for April during the week.
Chris Harmse is the consulting economist of Sequoia Capital Management and a senior lecturer at Stadio Higher Education.
Chris Harmse is the consulting economist of Sequoia Capital Management and a senior lecturer at Stadio Higher Education.
Image: Supplied
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