The South African rand edged lower on Monday, ahead of a pivotal week marked by the national budget speech and a planned meeting between President Cyril Ramaphosa and U.S. President Donald Trump in Washington. By 15h10 GMT, the rand was trading at 18.0625 to the dollar, down around 0.20% from Friday’s close.

Despite Monday’s decline, the rand has gained in recent weeks, buoyed by speculation that the government may soon announce a lower inflation target, and by market confidence that the ruling coalition will hold together despite ongoing budget disputes. However, the currency faces several key tests on Wednesday. President Ramaphosa is set to meet with President Trump, while Finance Minister Enoch Godongwana will present his third attempt at the 2025 budget to parliament. The day will also see the release of domestic inflation and retail sales figures. On the Johannesburg Stock Exchange, the Top-40 Index closed around 0.10% lower.

Across the Atlantic, Wall Street recovered from earlier losses as investors continued to weigh the impact of rising deficits, elevated interest rates, and trade policy uncertainty on corporate earnings. The S&P 500, Nasdaq 100, and Dow Jones Industrial Average all ended slightly higher, having opened the session sharply lower. Notably, Moody’s downgraded the U.S. sovereign credit rating, becoming the last of the major rating agencies to strip the country of its AAA status. The move reinforced growing concerns about fiscal stability, echoing sentiments from the Federal Reserve and sections of the market.

In the UK, the FTSE 100 rose by 0.20% on Monday, extending last week’s 1.50% gain. Investor sentiment was buoyed by the landmark UK-EU agreement, described as a “historic day” for post-Brexit relations. The deal covers crucial areas including trade, energy, security, travel, and fisheries. Travel sector stocks rallied, with EasyJet and IAG both gaining over 2%, following news that British tourists would regain fast-track access at European borders.

European equities were broadly steady, with the STOXX 50 and STOXX 600 both closing flat at 5 427 and 550, respectively. Despite early losses, markets remained near two-month highs as investors weighed macroeconomic uncertainty against the backdrop of potential ECB rate cuts and increased deficit spending by key Eurozone economies.

In Asia, Japanese equities declined, with the Nikkei falling 255 points (0.70%) to 37 499, following a subdued previous session. The broader Topix slipped nearly 0.10%, marking a second consecutive day of lacklustre performance. Market sentiment was dampened by a sharp drop in U.S. futures after Moody’s downgrade of the U.S. credit rating triggered concerns about a potential sell-off in American assets.

Chinese markets followed suit, closing flat. The Shanghai Composite ended the day at 3 368, while the Shenzhen Component was little changed at 10 171. Investors digested mixed economic data from April, which showed slowing retail sales growth—falling short of expectations—amid weak domestic consumption and income growth. While industrial production exceeded forecasts, it slowed from March’s pace. Meanwhile, the unemployment rate edged lower.

In commodities, WTI crude oil futures declined to around $62.10 per barrel on Monday, pressured by weaker economic data out of China and the downgrade to the U.S. credit rating. Conversely, gold prices rose above $3 220 per ounce, rebounding after their steepest weekly fall in six months. Demand for safe-haven assets was driven by rising concerns over the U.S. economic outlook and widening budget deficit.