Markets In A Nutshell
World
South Africa
Equities
World
Equities retreated on the Fed’s more hawkish tone, Russia’s invasion of Ukraine and Chinese COVID-19 lockdowns — commodity export emerging markets excluding Russia outperformed
South Africa
South Africa was the standout emerging markets equity performer in US dollars — as resources benefited from the commodity price rally and financials delivered earnings beats on undemanding valuations
Bonds
World
Developed market bonds sold off on expectations that inflation pressures would persist — on higher US wages and rampant energy and food prices
South Africa
The SA yield curve flattened marginally on higher short-term rates — high coupons resulted in the All Bond Index advancing for the quarter
Currencies
World
The US dollar rose against all the majors in anticipation of higher US interest rates — as the Fed turned decidedly hawkish
South Africa
The rand strengthened against major currencies on improved terms of trade — and SA’s attraction as an emerging market safe haven given geopolitical headwinds in Russia and China
Commodities
World
Russia’s invasion of Ukraine unsettled markets and sparked a sharp rise in energy and soft commodity prices — precious metals gold and silver rallied on the eruption of geopolitical risk and the prospect of stubbornly higher inflation
Economy
World
The fast pace of global economic growth slowed — as the base effect of post-lockdown economic re-openings started to fade
South Africa
Inflation accelerated on better-than-expected economic recovery — sharply higher global fuel and soft commodity prices should add to inflation pressures in the months ahead
Monetary and fiscal policy
World
The Fed raised rates by 0.25% and indicated that balance sheet reduction and more rate increases would happen quicker than previously guided — the US Federal Reserve is forecasting up to eight interest rate increases for 2022
South Africa
National fiscus projections improved with windfall tax receipts and mining royalties on the export commodity price boom — while SARB raised interest rates another 0.25% to combat inflation expectations