Markets In A Nutshell
World
South Africa
Equities
World
The global equity rally was sustained despite prospects of US interest rate rises coming earlier than expected—on continued stimulus, vaccine rollouts and the improving global economic outlook
South Africa
The JSE moved sideways, weighed down by the retracement of the resources index on lower commodity prices—but the listed property sector continued to recover from 2020’s lows
Bonds
World
Developed market long bond yields declined even with accelerating US and Eurozone inflation—policymakers suggest rising inflation is transitory
South Africa
The All Bond Index rallied as SA bond yields tracked global rates lower—longer dated bonds outperformed as the yield curve flattened
Currencies
World
The US dollar was weaker against other majors on improved global data—but rallied after the US Federal Reserve showed it would not tolerate structurally higher inflation
South Africa
The rand rallied through R14/$ on South Africa’s favourable terms of trade and record trade surplus—but later retraced on waning commodity prices and SA’s rampant COVID-19 caseload
Commodities
World
Oil and natural gas were sharply higher after OPEC+ signalled robust demand amid managed supply—precious and industrials metals also rallied but retraced latterly on US dollar strength and easing inflation worries
Economy
World
The World Bank says global GDP will expand at its fastest post-recession pace in 80 years, led by a few key economies—but many emerging economies will still struggle with the pandemic’s aftermath
South Africa
Mining output has sustained the recovery of the SA economy, albeit with economic output still well below pre-pandemic levels—but the jobs bloodbath continues
Monetary and fiscal policy
World
The US Fed dismissed nascent inflation as transitory but spooked markets by bringing forward to 2023 the date when it first expects to raise rates—global monetary policy remains exceptionally loose
South Africa
SARB again kept rates on hold but cited growing inflationary pressures as SA CPI rose to 5.2% in May—most economists now forecast repo rate increases in late 2021 or early 2022