Markets pretty much shrug off Trump’s attack on Ramaphosa

Even as US President Donald Trump lashed President Cyril Ramaphosa over alleged genocide affecting white farmers, neither the rand nor the JSE made any real moves.

During a televised meeting between the two late on Wednesday, Trump showed Ramaphosa a video of then EFF leader Julius Malema chanting “kill the boer, kill the farmer,” which dates back several years and highlighted the Witkruis Monument, which commemorates farmers killed during farm attacks.

The meeting between the two came on the same day that the third iteration of the National Budget was tabled. The “boring” fiscal framework is set to please investors and also didn’t affect markets dramatically.

Ramaphosa, who was not present for the tabling of the document for the first time since his inauguration nine years ago, joined virtually from Washington, where it was 5am.

The rand was stable early on Thursday morning at R17.97, after closing at a similar level on Wednesday evening. It opened at R17.89 on Thursday, which signifies no major movement. The JSE’s All Share Index, by late morning, was 0.56% down on the day, coming off its 1% gain and seven-day high at Wednesday’s close. 

Johann Els, Old Mutual chief economist, said markets are relatively calm following the fireside chat between Trump and Ramaphosa. “They're relatively around the levels that they were before the meeting over the last few days, in fact”. 

Els said markets might have expected perhaps a slightly worse outcome. “There was an ambush, but the President kept his calm, so I think it's roughly as expected to slightly better than expected, and therefore there's no big impact on markets,” he said.

Donald MacKay, founder and chief executive of XA Global Trade Advisors, said that there was, as yet, no indication of any trade deal. Following Trump’s April 2 “Liberation Day” announcement of worldwide tariffs, the US President backtracked and paused them for 90 days. 

As a result, South Africa’s 30% import tax was also halted, although the one affecting the automotive sector remained in place. 

MacKay added “what is interesting though, is that China got another 90-day reprieve on their tariffs, which is a sign, I think, that Trump is feeling pressure at home. This could translate into South Africa also seeing an extension of the 90 days.”

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