Vassili Panoussis

One of the highlights of Q3 was the Federal Reserve being open to easing interest rates given the lower inflation rate and a jobs market that is starting to show signs of weakness. Jerome Powell shifted gears from a rate-hiking hawk to being a more rate-decreasing dove – a change that the markets have welcomed with a ‘risk-on’ sentiment that has perpetuated for weeks.

We expect this euphoria to continue into the fourth quarter and expect to see higher highs for equities; we are particularly bullish on emerging markets and have overweighted accordingly. With the Fed expected to cut rates more regularly, this gives most emerging markets space to cut their interest rates too. As a result, we expect South African government bonds to continue their rally as real yields continue to compress.

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