MARKETS IN A NUTSHELL
WORLD
EQUITIES
World equity markets sold off sharply — slowing Chinese growth, continued US-China trade conflict and tighter liquidity spurred investors out of risk assets
BONDS
US 10-year bond yields fell rapidly as investors fled to safe-haven assets resulting in the flattest US yield curve since 2007 — signalling market nervousness that the US economic expansion is ending
CURRENCIES
The US dollar gained against the euro and pound but was weaker against the yen — investors view the relative isolation of the Japanese economy as a refuge during bouts of market volatility
COMMODITIES
Precious metals gold and silver rose sharply as investors sought safe-haven stores of value — but oil fell heavily on surging US production and unexpectedly high post-sanctions Iranian production despite December’s OPEC-agreed production cuts
ECONOMY
Notwithstanding continued US economic strength, data indicating slowing ex-US growth unnerved markets — the economic expansion cycle is now decidedly late stage
MONETARY AND FISCAL POLICY
The US Federal Reserve raised its benchmark rate for the fourth time in 2018 and continued its balance sheet normalisation — the ECB is starting its own quantitative easing withdrawal programme
SOUTH AFRICA
EQUITIES
The JSE declined despite rand weakness buoying global companies listed on the bourse — several big non-resource rand-hedge stocks suffered steep sell-offs while SA Inc. companies were mostly lower
BONDS
SA government bond yields fell on safe-haven buying — the SA All Bond Index outperformed cash as the only asset classes to achieve a positive quarterly return
CURRENCIES
The rand weakened as investors sought refuge in traditional safe-haven currencies — open, twin-deficit economies remain vulnerable to quantitative tightening
COMMODITIES
Precious metals gold and silver rose sharply as investors sought safe-haven stores of value — but oil fell heavily on surging US production and unexpectedly high post-sanctions Iranian production despite December’s OPEC-agreed production cuts
ECONOMY
The economy exited the technical recession, but growth remains challenging — as demonstrated by Mboweni’s sobering inaugural Medium-term Budget Policy Statement and Eskom load-shedding
MONETARY AND FISCAL POLICY
SARB raised interest rates in December despite the sharply higher fuel price and pressured consumer — but the Monetary Policy Committee was evenly divided, indicating moderating hawkishness