As Uncertainty Rules, Rate Cuts are Gone

🌍 World Wide Markets – Episode 669 📅 11 March 2026 | Hosted by Simon Brown Powered by Standard Bank Global Markets, Retail & SHYFT 🧭 Market Mood: Chaos Means Doing Nothing With geopolitical tensions and wild commodity moves, markets are extremely uncertain. Simon's strategy right now? 🧘 Do nothing. Panic trading rarely helps. In times of chaos, sometimes the best move is to step back, ignore the noise, and let events unfold. 🛢️ Oil Shock: From $60 to $120 Oil has been incredibly volatile. 📊 Recent moves Early January: ~$60 Monday spike: ~$120 Tuesday: briefly below $90 Current level: ~$91 That still means oil is about 50% higher year-to-date. The big issue remains disruption around the Strait of Hormuz. 🚢 Shipping traffic Normal flow: ~20 million barrels/day Last Wednesday: 0 barrels Monday: ~20% of normal Oil supply is slowly returning, but the situation remains fragile. ⛽ What This Means for South Africa Higher oil prices feed directly into local fuel prices. 💸 Earlier estimates suggested: Petrol: +R5.40 Diesel: +R10 After oil pulled back slightly: Petrol increase may be ~R3 Diesel ~R5 Still extremely painful for the economy. 📈 Inflation & Interest Rates Oil shocks ripple through inflation. 📊 Rule of thumb: Every $10 increase in oil adds ~0.4% to global inflation. With oil roughly $30 higher, that could mean: ➡️ ~1.2% extra global inflation For South Africa, that pushes inflation above 4% again. 🏦 Rate Cuts Are Off the Table Upcoming meetings: 🇺🇸 Fed decision: 18 March 🇿🇦 SARB MPC: 26 March Previously expected: rate cuts. Now? ❌ Cuts unlikely Central banks will wait to see if second-round inflation effects emerge, things like higher transport and food costs. ⚔️ The War Question Markets are asking one thing: How long does this conflict last? Current signals: Iran says it won't capitulate US and Israel still active UAE attacks have slowed One possible constraint: missile inventories. Iran's cheaper drones and missiles are being intercepted by extremely expensive defence systems. At some point, stocks run out. 🛢️ G7 Emergency Oil Plan The G7 strategic reserves may be tapped. 📦 Strategic reserves: ~1.2 billion barrels Possible release: ➡️ 300–400 million barrels This could cover roughly 15–20 days of supply shortages caused by Hormuz disruptions. That would buy time while infrastructure is repaired. 📉 Best vs Worst Oil Scenarios Best Case ✔ Conflict ends within weeks ✔ Strategic reserves released ✔ Oil stabilises in the $80s Worst Case 🔥 War escalates 🔥 Shipping disruptions persist 🔥 Oil spikes to $150–$200 At those levels, we start seeing demand destruction — people simply use less energy. 🤖 New Structured Product: AI & Big Data Auto Call Standard Bank has launched a new structured product. 📊 AI & Big Data Auto Call Key features: 💰 Return: 14% per year 📅 Term: Up to 5 years 🔁 Auto-call: Annual payout if index is flat or positive 💵 Currency: Rand 📉 Capital protection: Up to 30% downside buffer at maturity 📥 Minimum investment: R25,000 🧠 Index Constituents The product tracks the Solactive AI & Big Data Index. Top holdings include: Nvidia Palantir Snowflake AMD Broadcom SoundHound AI Kingsoft Cloud BigBear.ai DataVault Zenitech Total: 30 companies in the index. 🇿🇦 SA GDP: Small Steps Forward South Africa released Q4 GDP. 📊 Q4 2025: +0.4% Full-year growth: 2024: 0.5% 2025: 1.1% Not amazing, but improving. Forecast for 2026: 📈 1.6% – 1.8% If that happens, SA could finally see GDP growth above population growth, meaning real gains in wealth per person. 🎬 Paramount Buying Warner Bros (Again…) The media industry continues consolidating. Deal overview: 💰 Paramount Skydance buying Warner Bros Discovery 📦 Price: ~$100 billion Netflix initially pursued the deal but walked away. 💵 Result: Netflix collected a $2.8B break fee Its stock jumped ~15% 🇨🇳 Tencent Joins the Deal New twist: Tencent plans to invest several hundred million dollars in the acquisition. For South African investors: Satrix 40 → Naspers → Prosus → Tencent → Paramount. Yes… it's complicated. 🎥 Why Simon Thinks This Is a Bad Idea The concerns: 📉 Traditional media is declining 🤖 Studios betting on AI-generated content 🏛️ Politics may influence the deal Warner Bros also has a long history of failed mega-mergers, including the infamous AOL–Time Warner disaster. Simon's take: This deal will likely be unwound later and probably at a lower price. 🕒 Market Hours Change The US switched to daylight savings. New trading times for South Africa: 📈 US markets open at 15:30 (was 16:30) ✈️ Personal Note Simon is heading to Durban this weekend for his nephew's 18th birthday. Time flies. ✔ Key Takeaway Markets right now are being driven by geopolitics and energy prices. Until the oil situation stabilises, central banks, and investors, are likely to remain cautious. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order