March saw the end of the last standing negative interest rate, with Japan’s central bank raising its policy rate into positive territory. Globally, equity markets continued trending upwards in the face of broadly neutral economic news, as market participants continued to discount the chance of a recession, which also contributed to solid, if unspectacular, fixed income returns. Global inflation continued to fall or hold at current levels, largely in-line with expectations; and business sentiment generally rose. Risks do, however, remain and central banks have been wary of cutting interest rates too soon. The UK, US and Euro Area all maintained current interest rates during the month.
South African (SA) equity meaningfully outperformed global equity and was the best performing asset class for SA investors. Global asset classes, in general, experienced a currency headwind as the rand found some support and strengthened over the month. Local bonds had a tough month with yields rising right across the curve, particularly in the long end, negatively affecting bond prices. Local property softened whilst global property performed better despite a stronger rand.
