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Market Commentary | The week that was

Updated: Jan 24

The general move to a tighter monetary policy remains the key theme for investors globally. The era of ultra-cheap cash is coming to an end, and this will likely have a prominent effect on market performance.

Last month - as had been widely expected - the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, announced a repo rate increase of 25 basis points to 4%.

In the United States, bigger than expected job gains released last week suggests that the Federal Reserve might kick-off with a 50-basis points rate hike in March. Another key figure in average hourly wages rose 5.7% from a year earlier – pushing inflation higher and giving the Fed even more reason to start the hiking cycle.

Looking at the week ahead: On Thursday (10 February) President Cyril Ramaphosa will deliver his State of the Nation Address; and later in the week the United States will announce its key inflation rate amid expectations that it will print higher than the long-term goal.

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