The South African rand strengthened slightly on Tuesday after the second-largest party in the coalition government announced its intention to support the final major piece of budget legislation. The Democratic Alliance (DA) confirmed it would vote in favour of the Appropriation Bill in Parliament on Wednesday, following President Cyril Ramaphosa’s decision to dismiss a minister accused of misconduct - meeting one of the DA’s key demands. By 15h15 GMT, the rand was trading at 17.6050 against the US dollar, up 0.10% from Monday’s close. Meanwhile, the Johannesburg Stock Exchange’s Top-40 index ended the day down 0.40%.

US equities fluctuated between modest gains and losses on Tuesday, following record closes for both the S&P 500 and the Nasdaq in the previous session. Investors remained focused on ongoing tariff discussions and a fresh round of corporate earnings. The United States continues trade talks with key partners, and Treasury Secretary Bessent announced plans to meet Chinese officials next week, fuelling hopes that the looming 12 August deadline for China-related tariffs might be postponed.

European markets closed lower for a third consecutive session, weighed down by persistent concerns over potential US tariffs. The Eurozone’s STOXX 50 fell 1% to 5 288, while the pan-European STOXX 600 declined 0.50% to 544. Secretary Bessent noted that the White House is prioritising trade deals it considers strategically advantageous, rather than rushing to finalise agreements before the 1 August deadline - raising the likelihood that the proposed 30% tariffs on EU exports could be enforced before talks conclude.

In the UK, the FTSE 100 ended Tuesday marginally higher at 9 020, surpassing its previous record close. Gains were underpinned by strong corporate updates, with Compass Group rallying over 5% after raising its revenue growth forecast and announcing a €1.5 billion acquisition of Dutch hospitality firm Vermaat. Centrica also climbed more than 4.50% after confirming it had secured a 15% stake in the Sizewell C nuclear project, joining a group of major investors including the UK government. Analysts suggested the deal could strengthen Centrica’s earnings and enhance its financial resilience.

Asian markets presented a mixed picture. Japan’s Nikkei 225 edged down 0.11% to close at 39 775, while the broader Topix Index rose 0.06% to 2 836, as investors digested the weekend’s election outcome. Although the ruling coalition lost its majority in the upper house, the result was widely expected and had a muted effect on market sentiment. In China, equities extended their recent rally, with the Shanghai Composite climbing 0.62% to 3 582 and the Shenzhen Component rising 0.84% to 11 100 - marking a fourth consecutive session of gains and pushing mainland indices to multi-month highs.

In commodities, WTI crude oil futures fell over 1% to approximately $65.10 per barrel amid ongoing concerns about global demand, fuelled by uncertainty surrounding trade negotiations. Gold prices reversed early losses to rise above $3 420 per ounce, reaching their highest level since 16 June, as weakening US Treasury yields and a softer dollar continued to drive safe-haven demand.