November continued the trend of positive performance delivered by the major domestic investment asset classes. We saw impressive returns from bonds, equities, cash, and currencies as global investors piled back into emerging markets. The positive shift in risk sentiment was propelled by less hawkish comments made by US Federal Open Market Committee (FOMC) president, Jerome Powell, as well as a lower perceived risk of a global recession. Global central bankers continued to tighten financial conditions in November. Notably, the FOMC increased its benchmark interest rate by another outsized 75 basis points (bps) while remarking that the rate of increases will likely be lower in coming months. The South African Reserve Bank (SARB) also raised the local benchmark interest rate by 75 bps, bringing the Repurchase Rate to 7.0%. This is 25 bps higher than before the Covid pandemic. South African money market investments were consequentially impacted by the SARB raising its benchmark interest rate. The money market flattened significantly with the 3-month Jibar rate increasing 68 basis points and 12-month Jibar increasing by a mere 14 basis points over the month of November. The one-year treasury bill remained unchanged over the period at 8.27% as the National Treasury elected to […]
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