Markets In A Nutshell
World
South Africa
Equities
World
Global equities rose, driven narrowly by a handful of outsized US tech names on AI frenzy — emerging markets were flat, pulled lower by Chinese stocks on concerns for slowing economic growth and rising geopolitical tensions
South Africa
The FTSE/JSE All Share Index was little changed in rands but lower in US dollars on adverse prospects and sentiment — and weighed down by resources stocks which sold off on generally lower commodity prices
Bonds
World
Developed market bond yields rose to multi-decade highs on hawkish central bank responses to sticky ‘core’ inflation — more US debt issuance is expected after an eleventh-hour debt-ceiling resolution
South Africa
SA bonds sold off sharply on net foreign selling on deteriorating fiscal fundamentals and a low-growth debt trap — compounded by SA’s arms-to-Russia fiasco
Currencies
World
The US dollar was slightly weaker against other majors as the market anticipates that US rate hikes will peak first — but the yen was sharply weaker as the Bank of Japan practiced continued abeyance
South Africa
The rand was in freefall, weakening sharply intra-quarter to record-lows against the US dollar — on persistent loadshedding and rising Western worries for SA’s perceived Russian friendship
Commodities
World
Oil and copper were sharply lower as markets fretted about prospects of a US-led global recession — while precious metals gold and silver fell latterly as a risk-on tech rally gripped markets
Economy
World
Higher inflation and rates haven’t dramatically slowed economic growth, especially in the US where fixed-rate mortgages predominate — but signs suggest that small businesses may start to suffer as lending standards tighten
South Africa
The IMF and SA Reserve Bank both forecast anaemic GDP growth for SA in 2023 — the economy has been severely hampered by loadshedding and policy own goals
Monetary and fiscal policy
World
Despite a ‘hawkish pause’, the US Federal Reserve expects two more US rate hikes this year — while central bankers in the UK and Eurozone are also hawkish
South Africa
SARB raised rates by 0.5% to tackle the deteriorating inflation forecast — with little effect on the rand, it suggests we may be beyond the point where rates support the currency