The US recorded its biggest monthly inflation decline in more than six years in July, as lower energy prices provided temporary relief from this year’s inflation surge. However, US GDP contracted in the second quarter despite strong consumer spending. China’s factory activity unexpectedly contracted in July for the first time since February, with weakness extending beyond manufacturing to construction, services and the composite PMI. Eurozone inflation rose in July, although price pressures differed across the bloc. Locally, the South African Reserve Bank (SARB) kept its key repo rate unchanged at its July meeting, surprising analysts after inflation reached a recent high.

Global equities ended positively at the start of the second half of 2026, with the MSCI World Index ending the month at 0.51% month-on-month (m/m), keeping performance for global equity investors in double digits at 10.26% year-to-date (YTD), both in US dollar terms. The semiconductor cohort was the biggest contributor to July’s performance. Emerging market (EM) equities struggled in July, with the MSCI EM Index ending the month at -3.03% m/m (in US dollars), as Korean chip makers weighed on the MSCI EM Index’s performance. Chinese shares were the star EM performers in July, as President Xi Jinping called for accelerated tech self-reliance, positioning China as a global tech leader by 2035, while Beijing mobilised an extraordinary range of statelinked institutions to support equities. The FTSE 100 ended July in positive territory at 3.69% m/m, although this was lower than June’s 0.69% m/m gain in pound sterling. The S&P 500’s June losses of -0.95% m/m continued into July at -0.06% m/m in US dollars. Global bonds’ June losses of -0.49% m/m continued into July at -0.21% m/m in US dollars. After outperforming in June, global property continued its gains into July at 2.67% m/m in US dollars. The Euro Stoxx 50 Index’s gains continued into July, ending positively at 0.58% m/m after June’s 4.69% m/m gain in euros. The Dow Jones Index ended July in positive territory at 0.38% m/m, following June’s positive figure of 2.71% m/m in US dollars. After ending June as a gainer, the Nikkei Index ended July in negative territory at -8.13% m/m in yen terms.

The local bourse ended the month positively, with the FTSE/JSE All Share Index gaining 1.18% m/m in rand terms and 0.20% m/m in US dollar terms. Although Resources ended June in negative territory at -15.93% m/m, the sector posted gains of 2.06% m/m in July. Both Property and Financials outperformed in July, at 2.30% m/m and 1.16% m/m, respectively, compared with the previous month’s gains of 3.74% m/m and 2.62% m/m, respectively, in rand terms. The Industrials sector was in positive territory for July at 4.27% m/m, following June’s 0.78% m/m gain. Cash continued its positive returns from June to July in rand terms, ending at 0.57% m/m, but declined to -0.41% m/m in US dollar terms. Local bonds gained over the short term but encountered losses over the long term. The FTSE/JSE All Bond Index ended negatively at -1.38% m/m in rand terms and -2.34% m/m in US dollar terms. Bonds of 1-3 years were positive at 0.69% m/m; however, bonds of 3-7 years were negative for July at -0.23% m/m. Bonds of 7-12 years were also negative at -1.32%, and bonds of 12 years and above were negative at -2.34% m/m. The rand weakened against the US dollar by -0.97% m/m, against the euro by -1.60% m/m, and against pound sterling by -2.34% m/m.