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Monthly Wrap

DFM Monthly Wrap: October 2023

Investors shy away from risk assets amidst inflation and the Israel/Gaza conflict. The US grapples with persistent inflation, while the ECB maintains steady rates in the UK/Europe. In Asia, China confronts deflation risks, and South Africa, despite a positive mid-term budget response, remains vigilant as risks linger.
2 min read

Key Points

  • Investors cautious amid inflation and Israel/Gaza conflict
  • US tackles stubborn inflation, ECB maintains stable rates in the UK
  • China confronts deflation risks in Asian economic landscape
  • South Africa sees positive mid-term budget response, yet vigilant as risks persist

United States

Global stocks shed over $3 trillion during October. The MSCI World Index lost 3% in October. The US Fed left interest rates unchanged (5.25% – 5.5%) but signaled that rates may still go up in future. At the time of writing, 49% of S&P 500 companies reporting actual results, 78% of S&P 500 companies have reported a positive earnings per share (EPS) surprise and 62% reported a positive revenue surprise.


UK equities lost 3.7% in pounds as the economy grapples with higher inflation (6.7% in September) despite 14 consecutive interest rate hikes from the Bank of England. In Europe, equities fell 3.6% despite the ECB leaving interest rate unchanged at 4.5%. The war between Israel and Hamas has put a dampener on hopes of a sooner ECB pivot as inflation is now only expected to fall to 2% in Q4 2024.


In China, equity markets also fell in October by 4.3%. Inflation in September was 0% Y-o-Y, slipping closer to deflation and prompting the government to increase borrowing by 1 trillion renminbi ($ 137 billion) to support the local economy.

South Africa

The JSE/All Share Index lost -3% as all the main sectors retreated – Industrials were down -4.5%. Inflation rose to 5.4% in September, closer to the SARB’s upper target driven by higher food (+8.0%) and petrol prices (+7.6%).

The mid-term budget did not bring any surprises. The message was clear: budget cuts are coming, and condition-free bailouts are a thing of the past. The World Bank has announced it will support South Africa’s transition to using cleaner forms of energy with a $1 billion loan.

AngloGold Ashanti paid SARS a total of R4.5 billion in taxes as part of the transaction to move its corporate domicile to the UK and primary listing to the New York Stock Exchange.

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