In this week’s edition:
· US Equities Rally Strongly on Renewed Optimism Around Trade Talks
· Gold Extends Decline Amid Easing Trade Tensions, Down by 0.38% W/W
· Ghana’s Treasury Auction Sees Strong Demand for Second Week, Oversubscribed by 96.87% as Yields Fall Sharply
· Ghana Stock Exchange Rebounds on MTNGH Rally; Financials Lag Behind — GSE-CI Rises to 36.51% YTD, GSE-FSI Slips to 43.33% YTD
Kindly click to view the full report: Global Market Update - July 28, 2025
AROUND THE GLOBE
· U.S. and EU Reach Trade Deal to Avoid Tariff War
o The U.S. and EU struck a major trade deal, imposing a unified 15% tariff on most EU exports, including cars, to prevent a tariff war. Announced in Scotland by Donald Trump and Ursula von der Leyen, the pact includes U.S. energy purchases, investment pledges, and market access expansions. Metals duties will shift to a quota system; key details remain undisclosed.
· ECB Pauses Rate Cuts as Trade Risks Cloud Outlook
o The European Central Bank (ECB) held rates steady in July, ending its year-long easing cycle after eight cuts. The main refinancing rate remains at 2.15%, and the deposit rate at 2.0%. With inflation at the 2% target and trade tensions rising, the ECB adopted a cautious stance. President Lagarde said the Bank is “in a good place” but noted uncertainty around the inflation impact of U.S. tariffs. While not targeting exchange rates, she said the Euro's strength factors into inflation forecasts.
· US Composite PMI Hits 7-Month High in July
o The S&P Global US Composite PMI rose to 54.6 in July 2025 from 52.9, the fastest growth pace this year. Services activity led the expansion, while manufacturing grew modestly. Employment increased, but business confidence slipped due to federal spending cuts and tariffs. Rising wage costs and input prices pushed output inflation to a three-year high.
· Eurozone Lending Growth Accelerates in June
o Eurozone bank lending to households grew by 2.2% y/y in June 2025, the fastest pace since May 2023 and above a consensus forecast of 1.9%, reflecting recovering credit demand amid ECB policy easing. Business lending also rose to 2.7% from 2.5% in May. Overall private sector credit growth climbed to 3%, up from 2.8% the previous month.
· China FDI Falls 15.2% in H1 Despite Sectoral and Regional Bright Spots
o Foreign direct investment (FDI) in China dropped by 15.2% y/y to CNY 423.23 billion in H1 2025. Despite the overall decline, high-tech sectors saw gains: e-commerce services (127.1%), chemical pharma (53%), aerospace (36.2%), and medical devices (17.7%). Regionally, FDI from ASEAN (8.8%), Switzerland (68.6%), and Japan (59.1%) rose, helping to cushion the broader fall in investor inflows.
GHANA
· Ghana Cuts Budget Deficit Target to 2.8% on Stronger Revenue Outlook
o Ghana has lowered its 2025 budget deficit target to 2.8% of GDP from 3.1%, citing improved revenue and reduced spending. In his mid-year budget review, Finance Minister Cassiel Ato Forson projected GHS 229.9bn in revenue and GHS 269.5bn in expenditure, trimming borrowing needs by GHS 4.3bn. The revisions align with IMF targets and reflect continued fiscal consolidation under Ghana’s $3bn bailout programme.
· BoG’s MPC Commences Economic Review to Guide Policy Rate
o The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) commenced its 125th regular meeting today, July 28, 2025, to evaluate recent macroeconomic developments and determine the future path of interest rates. The three-day session will review inflation trends, exchange rate stability, and fiscal performance. Although inflation has eased and the cedi has appreciated, the IMF has advised the central bank to sustain a tight monetary stance to curb inflation expectations. Markets await the MPC’s decision for policy direction cues.
AFRICA
· South Africa Inflation Hits 4-Month High at 3% in June
o South Africa’s inflation rate climbed to 3% in June 2025, up from 2.8% in April and May, marking a four-month high. The rise was driven by cost increases in food, health, and personal services. However, core inflation eased to 2.9%, its lowest since April 2021. Monthly inflation rose by 0.3%. Declining transport costs and slower housing price growth helped offset some upward pressure.
· Nigeria Holds Interest Rate at 27.5% Amid Cooling Inflation
o The Central Bank of Nigeria maintained its benchmark interest rate at 27.5% on July 22, 2025, marking the third straight hold. This decision follows a continued drop in headline inflation to 22.22% in June, though core and monthly inflation ticked higher. The Monetary Policy Committee emphasized global risks, including U.S. tariffs, and stressed the need to sustain its current stance to fully tame inflationary pressures.
Sources: Bloomberg, Reuters, Trading Economics
