Weekly Market Update - Monday, August 17, 2026

In this week's edition:

• U.S. Stocks Closed Mixed Last Friday, as Macroeconomic Headwinds Weighed against Signs of Tech Optimism.
• Gold Increased by 0.80% w/w as Expectations of a Fed Rate Hike Declined.
• Ghana’s Treasury Rejects 56.72% of Total Bids Tendered, Forcing Interest Rates Down.
• Broader Market Appreciation as GSE-CI Rises by 0.79% w/w to 74.54% YTD, GSE-FSI Also Rose by 1.19% w/w to 74.67% YTD.
  

AROUND THE GLOBE   

• Fitch Affirms U.S. at AA+ Amid Fiscal Strains
  • Fitch affirmed the U.S. sovereign credit rating at AA+ with a stable outlook, highlighting the country’s large economy, high per-capita income, and the dollar’s global reserve status. Despite tariffs, spending cuts, tighter border controls, and policy uncertainty, the economy has shown resilience and flexibility. Growth is projected to slow to 1.9% in 2026-2027 from 2.8% in 2025, with weaker labour demand and slower job creation. The fiscal outlook is pressured, with the deficit expected to widen to 7.4% of GDP in 2026-2027, the highest among AA-rated peers, driven by military, interest, Medicare, and Social Security costs.
• U.S. Budget Deficit Widens in July
  • The US government posted a $432 billion budget deficit in July 2026, widening from a $291 billion shortfall a year earlier and exceeding forecasts for a $346 billion gap. Government outlays rose to $766 billion from $630 billion in July 2025, led by Medicare spending of $174 billion. Social Security costs reached $141 billion, while net interest accounted for $104 billion and national defence for $91 billion. Meanwhile, government receipts fell to $334 billion from $338 billion a year earlier, with individual income taxes contributing $173 billion and social insurance and retirement receipts totalling $139 billion.
• U.S. Consumer Sentiment Falls in August
  • The University of Michigan’s consumer sentiment index fell to 51 in early August 2026, down from 55.2 in July and below market expectations of 54.5, ending two consecutive months of improvement. Both major components weakened, with the current conditions index declining to 51.8 and the expectations measure falling to 50.6. The deterioration was broad-based across political and demographic groups, with particularly sharp declines among older, lower-income and less-educated consumers, who are more exposed to rising prices.
• Euro Area GDP Annual Growth Rate Confirmed at 1% in Q2
  • The Eurozone economy grew 1.0% year-on-year in the second quarter of 2026, accelerating from an upwardly revised 0.5% in the previous quarter, according to second estimates. Strong AI-related investment, resilient government spending, and one-off factors helped offset the impact of the conflict in Iran and higher energy prices. Among the largest euro area economies, Spain remained the standout performer, with annual GDP growth of 2.7%, followed by the Netherlands (1.3%), Italy (1.0%), Germany (0.9%), and France (0.7%). Quarterly, the Eurozone economy expanded 0.4%, its strongest pace since the first quarter of 2025.
• PBoC Signals Targeted Support, No Major Easing
  • The People's Bank of China pledged to roll out “practical and effective” policy support promptly, while avoiding signals of major easing. In its quarterly monetary policy report released Wednesday, the central bank said it will intensify countercyclical adjustments, boost domestic demand, and channel more resources toward technological innovation and smaller firms. It vowed to conduct overnight reverse repo operations more frequently to fine-tune short-term rates, and urged that loans and bond financing be assessed together rather than focusing solely on credit growth.

AFRICA

• Kenya Leaves Interest Rate Unchanged for 3^rd Meeting
  • The Central Bank of Kenya left its benchmark interest rate at 8.75% on August 11th, 2026, a third straight hold, as policymakers stated that the current stance of monetary policy remained appropriate to ensure price and exchange rate stability. Headline inflation rose to 6.5%, driven by higher fuel costs that pushed up transportation and food prices, but remained within the bank’s 5% ±2.5% target range. Meanwhile, economic growth accelerated to 5.3% in the first quarter of 2026, from 4% in the previous quarter. Looking ahead, inflation is expected to remain within the target range in the near term, assuming a de-escalation of the Middle East conflict.
• Egypt Jobless Rate Hits Record Low
  • Egypt’s unemployment rate fell to 5.8% in Q2 2026, down from 6% in the previous quarter, reaching a record low. The labour force increased by 0.6% to around 35.64 million, as the number of unemployed declined by 2.4% to approximately 2.08 million, and employment rose by 0.8% to 33.6 million, the highest level on record, suggesting an improved capacity of the economy to absorb new labour market entrants, despite persistent gender disparities in labour market participation.
• South Africa Unemployment Rate Highest in 4 Years
  • South Africa’s unemployment rate rose to 33.6% in second quarter of 2026 from 32.7% in the first quarter, the highest since the second quarter of 2022. The number of unemployed people increased by 4.2% to 8.481 million, while employment edged down by 0.1% to 16.739 million. The labour force grew 1.3% to 25.220 million, although the participation rate slipped to 59.6%. The potential labour force, comprising people available but not seeking work or seeking work but unavailable, fell by 280,000 to 4.571 million, while those outside the labour force for other reasons increased by 72,000 to 12.519 million.

Sources: Bloomberg, Reuters, Trading Economics