In this week's edition:
· US Stocks Close Lower as Investors Brace for High-Stakes Trade Negotiations Between the US and China in Geneva During the Weekend
· Gold Rebounds with a 2.61% Weekly Gain, Driven by Safe-Haven Demand After President Trump’s New Tariff Threat Earlier in the Week
· Ghana’s Treasury Accepts All Bids at Auction but Sees a Slight 3.15% Undersubscription as Yields Continue to Decline Across the Curve
· Bullish Sentiment in Ghanaian Equities Lifts the Broader Market; GSE-CI to Match the Financial Stocks Index at 31.29% vs. 31.85% YTD, respectively
Kindly click to view the full report: Global Market Update - May 12, 2025
AROUND THE GLOBE
· Fed Holds Rates Steady, Warns of Inflation and Job Market Risks
o The Federal Reserve kept interest rates unchanged at 4.25%–4.50% in May 2025, maintaining a cautious stance amid growing concerns over inflation and job market risks linked to Trump’s tariffs. Chair Powell emphasized patience, saying it’s too early to shift policy. While growth remains solid, policymakers flagged rising uncertainty and signaled a continued data-dependent approach.
· U.S. and China Slash Tariffs, Pause Trade War for 90 Days
o Following high-level talks in Geneva, the U.S. and China agreed to cut tariffs and pause new trade actions for 90 days. The U.S. will reduce tariffs on Chinese goods from 145% to 30%, while China will cut its tariffs on U.S. imports from 125% to 10%, marking a significant step to ease trade tensions.
· BoE Cuts Interest Rate to 4.25% Amid Disinflation Progress
o The Bank of England (BoE) cut its policy rate by 25bps to 4.25% in May 2025, citing easing inflation and slowing growth. The split vote (5–4) reflected diverging views on the pace of easing. Inflation dipped to 2.6% in March, though a temporary rise is expected. The BoE signaled a cautious, data-driven path amid global uncertainty and softening demand.
· China Consumer Prices Fall for Third Straight Month
o China’s consumer prices declined 0.1% year-on-year in April 2025, marking the third month of deflation, amid trade tensions with the U.S., weak demand, and job uncertainty. Non-food prices were flat, while food costs fell less sharply. Core inflation held at 0.5%, and monthly CPI rose 0.1%, reversing three months of declines due to fresh food price rebounds.
· Japan Current Account Surplus Rises in March on Strong Income and Exports
o Japan recorded a current account surplus of JPY 3.68 trillion in March 2025, up from JPY 3.45 trillion a year earlier, matching forecasts. The surplus was driven by a higher goods trade surplus and a strong rise in primary income. However, deficits in services and secondary income widened. FY2024's surplus rose to JPY 30.38 trillion.
- GHANA
· Ghana Inflation Slows to 8-Month Low on Stronger Cedi
o Ghana’s annual inflation rate fell for the fourth straight month to 21.2% in April 2025, the lowest since August 2024, as a firmer cedi helped ease price pressures. Food inflation slowed to 25% from 26.5%, while non-food inflation dipped to 17.9%. On a monthly basis, consumer prices rose 0.8%.
· S&P Upgrades Ghana’s Credit Rating to CCC+
o S&P Global Ratings has upgraded Ghana’s credit rating from Selective Default (SD) to CCC+, following progress in debt restructuring and improving economic indicators. The upgrade reflects successful bilateral debt deals and positive IMF program reviews, boosting investor confidence, although vulnerabilities remain elevated.
- AFRICA
· South Africa Manufacturing Contraction Eases in March
o South Africa’s manufacturing output declined 0.8% year-on-year in March 2025, easing from February’s 3.2% drop and marking the mildest fall in five months. While key sectors like electrical machinery and chemicals remained weak, rebounds in glass, textiles, and footwear helped soften the downturn. On a quarterly basis, industrial output shrank 2.3% in Q1 2025.
· Kenya’s GDP Growth Hits 1-Year High in Q4 2024
o Kenya’s economy grew by 5.1% year-on-year in Q4 2024, the fastest pace in a year, up from 4.2% in Q3. The rebound was driven by gains in agriculture, services, and trade. Quarterly growth hit 1.8%, the strongest in two years. However, full-year GDP slowed to 4.7% due to political unrest and flood-related disruptions.
· Senegal Inflation Falls for Second Straight Month in April
o Senegal’s consumer prices dropped 0.2% year-on-year in April 2025, extending the deflation trend for a second month. The decline was driven by sharper falls in food (-1.2%) and communication (-8.8%) costs. However, prices rose in key sectors like healthcare and housing. Core inflation slowed to 1.8%, while monthly CPI fell 0.5%, matching March’s drop.
Sources: Bloomberg, Reuters, Trading Economics
