Markets In A Nutshell
World
South Africa
Equities
World
Developed market bourses were sharply lower as central banks executed synchronised monetary tightening as inflation soared — emerging markets underperformed as Chinese stocks fell on economic headwinds
South Africa
Rand weakness helped to buoy JSE Limited indices, which declined by low single-digit percentage points — helped by resources stocks that were market leaders, while financials and listed property lagged
Bonds
World
Developed market bond yields continued to rise as financial conditions tightened — on higher inflation, rising short-term interest rates and central bank quantitative tightening
South Africa
Bond yields tracked global yields higher — but the All Bond Index provided some safety and eked out a positive return
Currencies
World
The US dollar rallied further on relative US economic strength and rising interest rate differentials — and buoyed by its safe-haven appeal during periods of heightened volatility
South Africa
The rand weakened sharply on the global risk off sentiment, surging US dollar and foreign net selling of South African financial assets — compounded by deteriorating terms of trade
Commodities
World
Industrial commodity prices fell sharply from their June all-time highs on falling economic growth expectations and fading base effects — energy prices are lower but should remain well bid for now, while rising real yields and dollar strength will pressure the gold price
Economy
World
Global economic growth expectations continued to deteriorate, with a 2023 US recession becoming increasingly likely — while Europe confronts an energy crisis and China endures its COVID-zero policy and troubled property sector
South Africa
Quarter-on-quarter GDP growth turned negative as the base effects of the post-pandemic recovery faded — while Eskom unleashed the worst bout of loadshedding ever
Monetary and fiscal policy
World
The US Federal Reserve hiked rates by a third consecutive 75 basis point increase for a cumulative 3% since March — marking the fastest pace of tightening since the summer of 1980
South Africa
The SA Reserve Bank hawkishly followed the US Federal Reserve by raising rates 75 basis points twice in the quarter — to combat high inflation, which is at risk of staying higher for longer