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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

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