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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

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