MARKETS IN A NUTSHELL
WORLD
EQUITIES
Global equities rose on broad-based developed market strength, led by rampant US bourses — buoyed by the rising likelihood of a US–China “phase one” trade resolution
BONDS
Developed market government bond yields drifted higher as growth expectations improved — the US yield curve continued to normalise after its mid-year, panic-inducing inversion
CURRENCIES
The dollar was weaker against the euro and pound after a Tory electoral landslide improved prospects of a decisive Brexit — emerging market currencies gained on improved risk appetite
COMMODITIES
Gold and silver were sharply higher on escalating geopolitical risks and their increasing attractiveness as portfolio diversifiers — precious metals prices should stay well bid as the effects of a decade’s worth of experimental monetary policies inevitably begin to manifest
ECONOMY
Financials and industrials were mostly unchanged but a narrow set of precious metal miners led the bourse higher — as demand for commodities drove prices up
MONETARY AND FISCAL POLICY
Global interest rates are anchored at very low levels given the absence of meaningful inflation pressures — central bank indications are that low rates will endure through 2020
SOUTH AFRICA
EQUITIES
The FTSE/JSE Capped All Share Index tracked emerging bourses lower — with resources and financial shares falling most
BONDS
SA bonds achieved good returns after yields moved lower — on improved emerging market sentiment and benign inflation
CURRENCIES
The rand strengthened on improved emerging market sentiment and attractive real yields — but the currency is vulnerable given deteriorating public finances and the looming Moody’s credit rating decision
COMMODITIES
Gold and silver were sharply higher on escalating geopolitical risks and their increasing attractiveness as portfolio diversifiers — precious metals prices should stay well bid as the effects of a decade’s worth of experimental monetary policies inevitably begin to manifest
ECONOMY
South Africa registered its second quarterly GDP contraction for 2019 in the third quarter — growth prospects are bleak with the World Bank estimating 2020 growth to fall below 1%
MONETARY AND FISCAL POLICY
SARB kept interest rates unchanged despite recessionary conditions and benign inflation — expectations are that SARB will cut rates in the first quarter of 2020