The first cut is the deepest
It was a big week for South African investors, as the two most important central banks in their universe lowered policy interest rates. Of the two, the US Federal Reserve is the big gorilla, since its decisions can influence the South African Reserve Bank (SARB), but it is definitely not the case the other way round. Moreover, almost all global investments price off the Fed’s policy interest rate directly or indirectly. Therefore, Fed decisions ricochet across the world, including to South African markets. Nonetheless, the SARB’s decisions also matter to local asset classes.