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Austen Morris Associates participated in The Giving Tree program which was held on Tuesday, November 14 at 12:30 PM at the Green Peace Primary School in the Shanghai area.

This is the sixth year that AMA’s Managing Senior Partner, James Colclough, and Founding Senior Partner, Greg Morris, have led the program internally along with the marketing and events team. 

We believe it’s a program that makes a difference in the lives of children today as well as teaching values of education, generosity and a positive outlook for the future. The Giving Tree Program is organised by the Community Centre Shanghai alongside Home Sweet Home who organised the ‘filling of the Gift Bags’ on behalf of the AMA & AMA Friends and Family. Home Sweet Home also benefitted by receiving a contribution per bag filled.

This year we were joined by James’ wife Coco and their daughter Jasmine for the special Giving Tree ceremony at the school along with the Head of Recruitment Anu Aggarwal, Head of Client services Kelly Olver and Tamara  from the AMA marketing department.

A very special thank you to all of the AMA Shanghai staff who donated including; Anu, Kelly, Hulan, AMA admin and to Simon in our SA office.

To those in the community who joined our efforts in donating one or more bags including 35 personal friends of James and Coco Colclough we ‘Thank You’ from the bottom of our hearts.

If you want to get involved or more information contact CCS Giving Tree givingtree@communitycenter.cn

 

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IMG_1750On Thursday the 18th of May, Austen Morris Associates hosted a Private Client dinner at CAPO Rock Bund restaurant in Shanghai. The event was held in association with our long-term partner, Hansard International.

The event gave us the chance to relax and enjoy an evening of great food and fine wines with new and existing clients and to say ‘thank you for your loyalty’.

Our guests included clients old and new, from all walks of life, with a broad range of nationalities and professions being represented. A true example of the diverse client base Austen Morris Associates has grown over the past 22 years in the industry.

The venue, CAPO Rock Bund, did not disappoint, from the Champagne terrace, through to the exquisite private dining room, where expertly paired wine with a 5 course meal was enjoyed by all. Food, wine and service were exceptional, culminating in a perfectly cooked tender roast beef, carved table side by the executive Chef Gian Marco Russo.

Austen Morris Associates Senior Partner Jon Holand, Partner Matthew Riddington and Senior Consultant Darryl Viojan hosted the event, which was a perfect balance of an informative and social evening. A special thank you to Simon Murray of Hansard International who flew in from Hong Kong to join us for the event.

Austen Morris Associates is a globally respected and successful International Financial Planning and Wealth Management Company founded in 1994 with offices located throughout Asia and South Africa.

Invested together, always.

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Asia Pacific:

The MSCI Pacific Index was up 1.3% in the week ended 20 May 2016.

Japan’s TOPIX rose 1.8%. Sentiment was boosted by the release of better-than-expected GDP data, which showed that the Japanese economy had grown 0.4% in the first three months of the year— reversing a 0.4% contraction in the fourth quarter of 2015.

A weaker yen was also positive for Japanese exporters, as the currency was weighed down by further speculation around policy easing from the Bank of Japan.

Hong Kong’s Hang Seng rose 0.7%, shrugging off weaker economic data releases from mainland China. Worries over US interest rates also weighed on returns, but sentiment was boosted by strong demand from mainland institutions via the Shanghai-Hong Kong stock connect exchange link. The spike in Chinese demand coincided with a visit from a senior Chinese government official.

Elsewhere, Singapore’s Straits Times gained 1.1%, while Australia’s All Ordinaries was 0.4% higher, as merger news in the oil sector helped outweigh further volatility in commodity prices.

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United States:

US stocks delivered mixed returns in the week to 20 May, as sentiment was dominated by speculation over an earlier-than expected interest rate rise from the Federal Reserve (Fed). The S&P 500 and NASDAQ rose 0.3% and 1.1% respectively, while the Dow Jones Industrial Average slipped 0.2%.

Investor focus in the week was on the minutes of the Fed’s April policy meeting—released on Wednesday—which made it clear that a June rise was a possibility. The minutes stated that a summer increase would be “appropriate” if economic data and the labour market continue to strengthen and inflation moves towards the central bank’s 2% target. The minutes were reinforced by hawkish comments from several Fed officials, including William Dudley, president of the New York Fed.

The minutes came following solid economic data releases. US industrial production rose 0.7% in April, ahead of analysts’ forecasts, boosted by an increase in utilities production. Inflation also picked up. Consumer prices rose 0.4% in April, marking the biggest gain since February 2013 and bringing the annual rate of headline inflation to 1.1%. Core consumer prices—which exclude food and energy—rose 0.2%, bringing the annual rate down to 2.1% from 2.2%.

The housing and labour markets also continued to strengthen. Housing starts rose a stronger-than-expected 6.6% in April, while existing home sales rose 1.7%. Homebuilder confidence held steady in May, with a rise in expectations for future sales. Meanwhile, new claims for unemployment benefits declined 16,000 to 278,000 in the week ending 14 May.

Energy stocks were among the strongest performers in the week, boosted by a sharp rise in oil prices. Brent crude climbed close to the USD 50-a-barrel mark, hitting a six-month high, amid recent unexpected supply disruptions and sustained demand.

Elsewhere, Apple shares rose strongly following news that Warren Buffett had bought a USD 1 billion stake in the iPhone maker.

With the possibility of a summer rate rise now firmly back on the cards, investors will pay close attention to any comments from US policymakers over the coming weeks.

shutterstock_178709456shutterstock_245738872Europe:

In a quiet week on regional markets, the MSCI Europe crept 0.4% higher.

France’s CAC 40 rose 0.8%, while the Spanish IBEX gained 0.6%, Italy’s FTSE MIB returned 0.5% and the UK’s FTSE 100 was up 0.3%.

The German DAX lagged, dropping 0.4%, after index heavyweight Bayer, the drugmaker and chemicals producer, launched a USD 62 billion takeover offer for US agribusiness Monsanto. Shareholder concerns about the cost of the deal, which would be partly funded by capital raising and increased debt, sent Bayer’s share price down more than 10% over the week.

Financial stocks did well as markets moved to reflect the increased likelihood of another US interest rate rise before the end of the year, following the publication of the minutes of a relatively hawkish meeting of the Federal Reserve’s policy-setting board.

Positive earnings boosted technology stocks, while the energy sector was lifted by higher oil prices. Brent crude moved close to the USD 50-a-barrel mark for the first time since November 2015 on supply disruptions in Nigeria and a more positive assessment of the price outlook from brokers.

In the UK, sterling rallied after the latest polls pointed to a sharp decline in the probability of a Leave vote in the upcoming referendum on European Union membership. Data from the Office for National Statistics suggested the UK’s labour market is largely withstanding the uncertainty, with the unemployment rate holding steady at 5.1% in the first quarter of the year and the number of people in work rising, albeit at a slower pace than in late 2015.

The European Commission (EC) said it would postpone a decision on disciplinary action against Spain and Portugal for breaking budget rules until after both the UK referendum on 23 June and the Spanish general election on 26 June. EC president Pierre Moscovici said the commission did not believe this was the right moment economically or politically to get tough on countries that have struggled with their debt burdens.

Instead, Brussels said it wanted to see further efforts on the parts of both countries to reduce their borrowing and would review the situation in early July.

Meanwhile, ahead of a meeting of Eurozone finance ministers on 24 May, the International Monetary Fund again warned that it would not participate in the latest Greek bailout without an agreement on extensive debt relief.

shutterstock_229730320Global Emerging Markets:

The MSCI Emerging Markets Index fell 0.4% in the week ended 20 May as speculation increased that the US Federal Reserve would raise interest rates in the coming months.

A sharp 4.0% decline in Brazil’s Bovespa was a major reason behind the fall in the overall index. Brazilian stocks fell as positive sentiment over the country’s new government was replaced with concerns over the poor state of the Brazilian economy. The banks sector fell as the country’s finance minister nominated his candidate to head up Brazil’s central bank. Investors believe interest rates could be cut later this year as inflation eases.

Russia’s RTS dropped 3.1%, India’s Sensex declined 0.7% and Korea’s Kospi fell 1.0%—rounding off a fourth successive weekly loss—as emerging market currencies were hit by a strengthening dollar amid expectations for higher US interest rates.

The MSCI China Index rose 0.6%, supported by a stable currency despite a flow of weaker economic reports, as April’s purchasing managers’ index, bank lending and trade data all missed expectations.

Taiwan’s TAIEX rose 1.0% as president Tsai Ing-wen called for peaceful relations with China at her inauguration.

South Africa’s JSE All Share was up 2.0% as a weak rand boosted mining stocks.

shutterstock_164681621Bonds & Currency:

Bonds sold off in the week, with the US underperforming following the unexpectedly hawkish minutes from the Federal Reserve’s (Fed’s) April meeting.

The yield on the two-year Treasury note, which is particularly sensitive to shifts in perception of Fed policy, was up 13 basis points (bps) on the week to 0.88%, while the 10-year Treasury yield rose 13bps to 1.84%.

Austen Morris Associates is pleased to announce that Warwick Hamilton has joined our team in Johannesburg South Africa, as Senior Consultant.

Warwick‘s career spans a diverse and expansive level of achievement and experience. He spent 25 years in the service industry both in South Africa and abroad, where he held positions in operations as well as sales. These roles provided him with exceptional communication skills and provided great insight into different personalities and cultures. 8 years ago he joined the Financial Services sector, during this time he has been the recipient of many awards and has proven to be one of the top Consultants in Africa.

This vast personal and professional experience has made him a diverse and well-rounded Consultant, enabling him to cultivate long term relationships with an array of different clientele, building trust and maintaining strong business relationships.

Warwick holds qualifications from the Chartered Institute for Securities & Investments as well as the certification in regulatory examinations from the Financial Sector Conduct Authority, ensuring his clients are provided with specifically tailored advice. Warwick‘s board-level expertise exemplifies our 80/20 hiring approach, whereby we only hire the top 20% of professionals in our industry.

Welcome to the team Warwick, we look forward to working with you.

Austen Morris Associates is pleased to announce that Ben Nevin has joined our team in Johannesburg South Africa, as a Senior Consultant.

Ben has been working in the high-net-worth wealth management sector for the past four years. During this time he has held a series of accolades and senior positions and had the privilege of learning from some of the industry’s leading professionals, Ben attributes much of his success to his hard-working nature, embodying the quote “The harder you work, the harder it is to fail”.

Ben holds a Law Degree obtained through the University of South Africa, with a specialized focus on financial and banking regulation, a necessary skill set in regulated territories like South Africa, he subsequently completed a number of financial certifications FFR – Foundations of Financial Risk, HCWM – Higher Certificate in Wealth Management,  ensuring that he continually grows his knowledge base  and provides his clients with the best possible advice.

Ben carries the core values of honesty, integrity, loyalty and mutual respect into all areas of his life, this strength of character and hard work ethic, exemplifies our 80/20 hiring approach, whereby we only hire the top 20% of professionals in our industry.
Welcome to the team Ben,  we look forward to working with you.

At Austen Morris Associates we pride ourselves in engaging with our clients and keeping them informed on the latest market updates and current affairs.  In keeping with this tradition AMA Africa recently partnered with Vergenoegd Löw Wines and Discretionary Fund Managers, Quilter Cheviot to host 2 informative Investment Insight Sessions in South Africa.

Our March Insight Sessions, a breakfast session held in Johannesburg, at the prestigious  Bryanston Country Club as well as a lunch time session at Cape Town’s glorious Atlantic Imbizo, touched on the current situation surrounding BREXIT as well as looking at the value added by having the right Discretionary Fund Management.

Keynote speaker for the events was Head of Research at Quilter Cheviot, Chris Beckett. Chris graduated with an Honours Degree in Managerial Studies from Aston University in 1992, after gaining experience in the Financial Services Industry he chose to further his studies and completed a Master’s degree in International Securities, Investment and Banking from the ICMA Centre at Reading University.

As Head of Research at Quilter Cheviot, he currently has analytical responsibility for the beverages, food, tobacco and retail industries, making him a very diverse and well-rounded analyst and the ideal speaker for our Insight Sessions.

Chris provided our guests with invaluable insight into the current state of the Global Equities Market, highlighting the methodology that his team of analysts employs when making discretionary fund decisions. The second talking point of these sessions was closely examining the current state of affairs surrounding BREXIT. Chris engaged our attendees by analyzing and discussing the possible implications that different BREXIT outcomes could potentially have on the economy.

Our gracious sponsors Vergenoegd Löw Wines provided a premium selection of their award winning wines for our events, ranging from their current limited edition Adam & Eve range, to the elegant Little Flower Sparkling Brut, their organic Runner Duck Rosé as well as a selection of their 4 star Estate Blend and their ever enchanting rich Merlot.

Our guests thoroughly enjoyed both of these events and we look forward to hosting more Investment Insight Sessions for our clients and prospective clients this year.

Join us on Tuesday 16th April from 7 pm at Austen Morris Associates, Shanghai.  This month’s topic is Equities…where next?

Are you currently invested in stocks and shares that carry no fixed interest?  We take a look at what the key considerations should be for investors looking for long-term returns, where to look for the best growth opportunities, along with an investment outlook for the rest of 2019.

Registration begins at 7:00pm.

The presentation begins at 7:30 pm.

 Networking from 8:30 pm.

 For more information or to join us, please see the invitation below or email us on investedtogether@austenmorris.com

 

The Cape Town Cycle Tour, more commonly referred to as the Cape Argus is an annual cycle race hosted in Cape Town, South Africa. The course is 109 km long and takes riders past some of the most beautiful scenery in the world, including the 7th wonder of the world Table Mountain.

With as many as 35 000 cyclists taking part, the Cape Town Cycle tour is the world’s largest individually timed cycle race. It is the first event outside Europe to be included in the Union Cycliste Internationale’s Golden Bike Series.

2019 saw the 41st running of this world-famous cycling tour, it truly was a celebration of all things cycling, highlighting the healthy lifestyle and freedom of movement the humble bicycle offers all its inhabitants and visitors.

This year AMA Africa decided to get involved in this ever growing event by sponsoring cycling jerseys for one of our Senior Consultants, Leith Anticevich and his team of riders.

On the morning of Sunday 9 March 2019, Leith took to the road for his first participation in this spectacular race. Persevering through the howling winds clocked at 27m/ph, as well as a strained muscle – an injury he obtained just before the Suikerbossie climb – true to form Leith powered through the pain and managed to complete the race. Unfortunately the injury took him out of the running for achieving his personal time goal, but we are sure that next year he will reach his goal.

We wish him and his team luck as they start preparing for The Standard Bank Iron Man 70.3 in Durban this June.

Today we recognise consultant, Chad Goddard, for his 1 year work anniversary with Austen Morris Associates.

Thank you for your dedication and commitment to the team Chad,  we look forward to many more celebrations with you! From Greg, James and the entire team at AMA congratulations!

Today we recognise consultant, Leith Anticevich, for his 1 year work anniversary with Austen Morris Associates.

Thank you for your dedication and commitment to the team Leith,  we look forward to many more celebrations with you! From Greg, James and the entire team at AMA congratulations!

Today we recognise consultant, Keith Strong who is celebrating 14 years with Austen Morris Associates

Congratulations on this milestone Keith, we thank you for your continued loyalty, commitment and support over the years. From Greg, James & the entire AMA team, congratulations and well done, we look forward to many more celebrations with you!

US TREASURY MARKET RATTLED BY IDEA OF A RECESSION

By the end of the week, headlines on almost all major media outlets screamed that a recession in the US is imminent, as the Treasury curve inverted. Simply put, the yield on the 10-year US Treasury fell below the yield quoted on the 3-month bill, although only by a basis point. This phenomenon usually (but not always) predicts that a recession in the US is lurking around the corner. Whilst not downplaying the significance of the yield curve’s inversion, a recession does not seem likely for the following reasons:

  • in the past, an inverting yield curve was not always followed by a recession,
  • the ECB and the BoJ are unable to exit from their QE programmes which deter some capital flows to the US weighing on Treasury yields,
  • recent US macro data releases do not seem to imply economic stagnation or a recession,
  • and most importantly, due to the Fed’s extremely bloated balance sheet, nobody actually knows whether pre-crisis and pre-QE rules and correlations still apply, i.e. if the yield curve’s steepness is a reliable predictor.

United States 26 March 2019UNITED STATES

S&P 2,801 -0.77%, 10yr Treasury 2.46% -14.81bps, HY Credit Index 349 +7bps, Vix 17.09 +3.60Vol

Although the 3M-10Y steepness gauge turned to negative during the week due to macro data releases, other measures that capture the steepness of the yield curve remain “normal,” i.e. not signalling an upcoming recession. Nevertheless, the US stock market focused on the bearish aspects of the yield curve and consequently many of the major stock indices performed poorly, i.e. the Nasdaq Composite decreased 0.6%, the S&P500 declined 0.8%, while the Russell 2000 lost 3.1% of its value. By the end of the week, Fed funds futures massively repriced and now imply a 25bp rate cut for 4Q19 and on top of that a 25bp cut in 2020.

The Fed is going to be patient, according to Chair Powell, and thus shifted to a wait-and-see stance in the context of a jittery investor sentiment, as the Treasury market increasingly expects a sharp slowdown in economic activity. Chair Powell presented the updated “dot plot,” which now expects no rate changes throughout 2019 (vs. two 25bp hikes in the previous version). It was also confirmed that the balance sheet run-down will slow from May and end in September.

The Fed’s approach to monetary policy should persuade markets that the FOMC is willing to err on the side of being “too dovish” and let inflation exceed the target to make sure that underlying economic growth remains unhurt. Having said that, should tight labour market conditions persist throughout 2019 and translate into faster inflation, while real GDP growth is decent, the FOMC will probably raise the Fed funds rate to prevent the build-up of unwanted excesses.

Looking forward: The release of the final 4Q18 GDP data, the January PCE inflation figure and 4Q18 current account statistics will provide guidance to markets on the state of the US’ economy. Furthermore, high-level trade talks between the US and China will continue, as US Treasury Secretary Mnuchin travels to China with the aim to reach an agreement by April. 

Europe 26 March 2019EUROPE

Eurostoxx 3,302 -2.57%, German Bund -0.01% -9.90bps, Xover Credit Index 280 -9bps, USDEUR .884 +0.20%

European stock markets had an awful week, as macroeconomic data in the Euro Area disappointed, proving that economic growth is frailer than most expected. As a result, the German stock index declined by 3% in USD terms, followed by the French (-2.7% in USD) and the Spanish (-1.7% in USD), while the Italian benchmark went sideways (in USD). The fixed income market in the Euro Area was driven by the same idea: the fear of a recession. Consequently, the 10-year German Bund plummeted by 10bp to -0.02%.

Business sentiment in the Euro Area has been sharply deteriorating. The German manufacturing PMI underwhelmed all expectations, as the index dropped to 47.6 suggesting a considerable contracting in industrial output in the next few months. March was the third consecutive month when the German manufacturing PMI was below 50. Meanwhile in France, not only the PMI gauge for manufacturing, but also the one for services declined below 50.

Looking forward: The Euro Area’s aggregate economic diary does not contain any relevant macro data release for the week. Germany will reveal inflation metrics, while the UK will publish GDP and current account statistics.

Asia 26 March 2019ASIA

HSCEI 11,232 +0.11%, Nikkei 20,977.11 +2.15%, 10yr JGB- 0.08% 0bps, USDJPY 110.170 -1.30%

Asian markets fared well last week, as the majority of the broad stock indices gained in USD terms. The Philippine stock market was one of the best performers rising 2.8% in USD, followed by Chinese “A” shares (+2.7% in USD) and the Taiwanese market (+1.9% in USD).

The Thai central bank kept the policy rate stable at 1.75%. The decision was unanimous. MPC members agreed that real GDP will grow around its potential, as domestic demand continues to firm. The Thai central bank foresees real GDP growth at 3.8% in 2019 and at 3.9% in 2020. According to the central bank’s forecast, inflation could hover around or marginally above 1% both this and next year.

The Taiwanese central bank held the policy rate at 1.375%. The MPC maintained its accommodating stance given the benign inflationary environment and negative output gap. According to the central bank, Taiwanese real GDP may expand by 2.1% in 2019.

The Indonesian central bank left the policy rate unchanged at 6% for the fourth consecutive month, citing an uncertain external environment. The MPC emphasised that lending activity has become sub-optimal.

The Philippine central bank maintained the policy rate at 4.75%. The MPC cited that upside inflation risks have dissipated, implying that rate hikes are very unlikely. Although the new Governor strongly hinted that the central bank could start an easing cycle before the official monetary policy meeting, the MPC as a whole refrained from indicating a preference for dovishness in the short-term.

Should inflation fall below 3% and remain sub-3% for a prolonged period, the MPC will likely embark on an easing cycle. However, this scenario has a relatively low probability at the moment.

Looking forward: The Asian economic diary is filled with exciting data releases for the week. China and India will release their respective 4Q18 current account statistics, while Vietnam is set to publish a wide range of macroeconomic metrics. In addition, foreign trade data will be reported by Thailand and Sri Lanka. At the end of the week, the Pakistani central bank decides on the appropriate level of policy interest rate.

Latin America 26 March 2019LATIN AMERICA

MSCI Lat Am 2,713 -4.83%

Investor sentiment in Latin American stock markets was gloomy, which was captured by the MSCI EM Latin America index decreasing 4.8% in USD. The Brazilian market was down by 7.3% in USD, followed by the Chilean index (-3.6% in USD). In contrast, the Colombian and Mexican markets rose by 0.6% and 0.8% in USD, respectively.

Brazilian President Bolsonaro revealed the granular details of the Military Pension Reform complementing the ordinary Pension Reform bill. If the bill is passed in its current form, it will mean an additional BRL 10.3bn in savings per year over the next 10 years. Overall, the whole Pension Reform is set to save about BRL 1.1tn over 10 years’ time unless the measures in the bill are diluted by the Congress during the debate.

The Brazilian central bank kept the policy rate stable at 6.5%. The central bank foresees inflation in the range between 3.9-4.1% YoY at the end of 2019, i.e. around the mid-point of the inflation target. The tone of the MPC’s message was broadly neutral, citing data dependency for future rate decisions.

Domestic demand growth in Mexico decelerated to 0.8% YoY in 4Q18. In addition, exports growth lost momentum as well. Headline GDP growth slowed to 1.7% YoY in the last quarter of 2018, while full-year growth amounted to 2%. Meanwhile, inflation in Mexico was 4% YoY in the first two weeks of March, while the core gauge was 3.5% YoY. The degree and persistence of disinflation in 1Q19 was greater than expectations; primarily due to non-core inflationary developments, while core inflation has proven to be somewhat stickier.

Real GDP growth in Chile was 3.6% YoY in 4Q18, supported by both mining and non-mining sectors. In full-year 2018, the Chilean economy expanded by 4% on the back of the recovery of domestic demand (i.e. investments and household spending).

The Colombian central bank kept the policy rate at 4.25%. The decision was unanimous and MPC members hinted that the policy rate is likely to be kept stable in the coming months. According to the central bank’s assessment, the negative output gap has been closing, as GDP growth has been strengthening, while inflation remained contained.

Argentine real GDP fell sharply in 4Q18, as economic activity contracted by 6.2% YoY (-1.2% QoQ). In full-year 2018, real GDP declined by 2.5%. As GDP decreased in the last quarter of 2018, unemployment rose and hit 9.1%.

Looking forward: The Latin American economic diary is fully loaded for the week, including a monetary policy decision by the central banks of Mexico and Chile. Furthermore, the central bank of Brazil will release the minutes from its last monetary policy meeting.

credit scoreAFRICA

MSCI Africa 779 -0.43%

Risk-averse market sentiment plagued African stock markets, as most of the benchmark indices declined. The Egyptian and Kenyan markets under performed their peers, as they decreased by 0.7% and 0.8% in USD, respectively.

Retail sales in South Africa rose 1.2% YoY in January after a 1.6% YoY decline in the previous month. Meanwhile, inflation was 4.1% YoY in February, as food inflation remained steady. February was the third consecutive month when the headline CPI inflation gauge was below the mid-point of the central bank’s inflation target band (3-6%).

Morocco’s central bank left its policy rate at 2.25% in the context of a dis-inflationary environment. The monetary authority foresees inflation to slow to 0.6% in 2019 from 1.9% in 2018.

The Egyptian Finance Minister announced the official estimates for this financial year’s GDP growth and budget deficit target. The FinMin foresaw real GDP to grow 6.1% in FY2019-20 (July-June) and set the deficit target to 7.2% of GDP.

Looking forward: Central banks take the centre of the stage in Africa this week, as the Nigerian, Kenyan, Moroccan, Egyptian and South African monetary authorities are scheduled to decide on their respective policy interest rates. Later, Moody’s is set to deliver its rating review decision on South Africa on the 29th.

This week’s global market outlook is powered by Alquity www.alquity.com

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