IGA Capital Weekly Markets Update
- Joshua Hawley
- Sep 30
- 4 min read
Tue Sept 30, 2025
Joshua Hawley
Washington lunacy continues as the US Federal government shutdown looms, with apparently the real possibility that The Bureau of Labor and Statistics will cease operations starting this Friday with the Jobs Report. Did anyone ever think it might be wise to mandate Congressional qualifications to include Accounting and or Finance? Gold meanwhile on it's biggest rally in recent memory (since at least 1972). Silver outpacing gold this year by over 10%. Goldman targeting $4000 oz by mid 2026 going as high as $5k an oz by the end of 2026.
Market Overview
U.S. equity markets saw solid performance. The S&P 500 gained 2.4% over the last month, closing at 6,644. The Dow Jones rose by 1.4% over the same period, reaching 46,247.3, and the Nasdaq jumped 3.9%, finishing at 22,484.
Market expectations for future Federal Reserve policy are shifting, with the probability for the Fed Funds Rate to be in the 3.75%-4.00% range for the October 29, 2025 FOMC meeting decreasing slightly to 87.7% from 91.9% the previous week. The market is pricing in a series of future rate cuts, with the implied policy rate projected to drop to 3.19% by September 16, 2026.
Fixed Income and Sovereign Yields
The 10-year U.S. Treasury yield is currently at 4.14%, a decrease of 9 basis points (bps) over the past month. The yield curve remains steep, with the 2s/10s Treasury spread at 0.52% and the 5s/30s spread at 0.98% as of September 29, 2025. Other sovereign bond yields as of April 28, 2025, were: Canada at 3.22%, Germany at 2.72%, Japan at 1.64%, and Australia at 4.33%. The 1M Term SOFR is at 4.17% as of September 29, 2025.
Commodities and Digital Assets
The gold market continued its strong performance this week, with its price increasing to $3,817.30 as of September 29, 2025. This represents a 11.7% rise over the last month and a 104.7% rise over the last two years. Silver also performed exceptionally well, reaching $46.96, a 20.3% increase over the last month and a 107.5% increase over the last two years. Oil prices saw a slight increase, at $64.89, a rise of 1.8% over the last month.
The cryptocurrency market saw a rebound in sentiment this week. As of September 29, 2025, Bitcoin was trading at approximately $115,250. This stability follows a period of high volatility, with market participants now closely monitoring upcoming economic data for future direction. Other major cryptocurrencies also posted gains, reflecting renewed investor confidence in the sector.
Inflation and Economic Data
Key inflation measures present a mixed picture. The U.S. annualized Headline CPI is 2.90% as of August 2025, while Core CPI remains steady at 3.10%. The U.S. Gross Domestic Product (YoY) is 2.10%, and the unemployment rate is at 4.30%.
IGA Capital Perspective: Critical Minerals Funding and Debt Finance in Africa and the EU
The global transition to green energy has positioned critical raw materials (CRMs) as a new "currency of power," directly influencing industrial, geopolitical, and foreign policy across the EU and Africa. For IGA Capital, this environment presents both immense opportunity and complex risk in structuring debt finance.
The EU’s Strategic Imperative and Funding Gap
The EU's Critical Raw Materials Act (CRMA) is a foundational piece of legislation designed to secure supply and reduce reliance on any single non-EU country to no more than 65% of its annual consumption by 2030. The Act has set clear domestic benchmarks: 10% of annual EU consumption for extraction, 40% for processing, and 25% for recycling.
However, European private sector participation, particularly in Africa, has been largely absent, lagging behind competitors from China, Japan, and South Korea. The CRMA is a crucial first step, but EU funding tools are currently insufficient to meet the necessary scale and speed, presenting an ongoing challenge for crowding in private investment. There is a need for European financial institutions to offer stronger incentives and potentially price guarantees (both floor and ceiling) to shield producers from market volatility and encourage investment in extraction and local processing.
Africa’s Leverage and the Debt Challenge
Africa holds approximately 30% of the world’s proven critical mineral reserves, giving African states significant leverage to negotiate equitable partnerships. There is a strong economic case for European firms to establish midstream processing facilities in Africa, where costs (e.g., for a battery precursor facility) can be up to 40% lower than in Europe. African governments, such as those along the Lobito Corridor (Angola, DRC, and Zambia), are pushing for local value addition to capture greater economic benefits.
However, traditional debt finance in the African mining sector faces significant structural challenges:
Funding Gap: Sub-Saharan Africa requires over $200 billion annually for its energy-related targets, yet currently captures only about 3% of global energy investment.
Currency and Inflation Risk: Bank loans often carry high interest rates and are complicated by inflationary pressures and currency instability, as African countries repay hard currency loans at higher costs when local currencies depreciate.
Financing Mechanisms: To address these risks, institutions like the African Development Bank (AfDB) are exploring innovative models, such as a mineral-backed, non-circulating currency (African Units of Account - AUA) to facilitate borrowing in stable currencies while mitigating foreign exchange risk for repayment. Royalty and streaming agreements are also emerging as more flexible, risk-mitigated alternatives to traditional bank loans for African mining projects.
IGA Capital’s View
We view the critical minerals sector as a long-term strategic opportunity, but one that demands bespoke, structured finance solutions:
Prioritize Offtake/Security-Backed Debt: We see superior risk mitigation in debt structures tied to long-term European or US off-take agreements, providing credit support and cash flow visibility.
Focus on Value-Addition Finance: The highest value will be captured by financing midstream processing and refining facilities in Africa, rather than solely extraction. This aligns with African governments' priorities and the EU's need for diversified, non-raw material imports.
Hedge Against Sovereign and Currency Risk: We favor structures that utilize mechanisms like the AfDB's proposed AUA or incorporate robust financial hedging instruments to insulate project finance from local currency depreciation and political instability.
Strategic Complementarity: IGA Capital's clients are best positioned by seeking strategic partnerships that offer African partners a stake in value-addition, moving beyond pure extraction and aligning with the principles of the EU-Africa strategic partnerships.
Footnotes and Disclosures:
Source: Bloomberg
Sources: Walker & Dunlop
Data on Fed Funds Rate Target Probabilities: CME Group
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