Markets In A Nutshell
World
South Africa
Equities
World
Global equities rallied on expectations that inflation had peaked and that interest rates would soon trend lower — despite fears of a new banking crisis after three US banks failed and Swiss national icon Credit Suisse was forced to merge with rival UBS
South Africa
The JSE tracked global bourses higher, pulled up by index heavyweights Naspers / Prosus on China’s COVID-19 reopening and easing of prohibitive tech regulations — but resources stocks were down on generally lower commodities prices (excluding precious metals)
Bonds
World
Developed market bond yields were mostly lower on expectations that the rate rising cycle would soon peak — the US yield curve remains inverted, suggesting recession risk is high
South Africa
SA bond yields tracked global yields lower, with the SA All Bond Index delivering a positive return — SA has one of the steepest yield curves, reflecting the country’s long-term risks
Currencies
World
The US dollar was weaker against most majors — driven by changes to rate hike expectations, with the Fed’s big hikes almost certainly all behind us
South Africa
The rand weakened against the US dollar on deteriorating fundamentals — despite an intra-quarter rally after SARB surprised the market with a 0.5% repo rate increase
Commodities
World
The commodities complex was mixed, with precious metals rising and gold nearing the $2,000 mark — while energy prices, including oil, were lower and industrial metal prices fell
Economy
World
Developed market economies have improved growth prospects after energy prices abated and China’s economy reopened — inflation is lower in all markets, but core inflation delivered upside surprises in the US and Eurozone
South Africa
Economic growth prospects are beset by persistent (and worsening) load shedding — while FATF’s grey listing of SA for anti-money laundering failures added to the country’s woes
Monetary and fiscal policy
World
The US Federal Reserve raised rates by 0.25% twice, taking the federal funds rate to its highest level since 2007 — while the ECB played catchup, making two 0.5% increases, with the bloc’s inflation high but moderating
South Africa
The SARB delivered a surprise 0.5% rate increase when all expectations were for a hike half this size — citing inflation risks from energy, administered prices and food, with rand weakness a key worry