October was an astonishingly volatile month for all asset classes. US long bond yields dipped sharply below 2% on one day, and then rose again; equity markets dipped very sharply and mostly bounced back. Most commodity prices, however, did not recover and dropped more and currencies were caught up in the volatility as well. It was all a good reminder of the unbalanced global economy and the lack of robust growth outside the US.
On the surface, November was a calmer month for markets; but commodities were weak and the oil price in particular fell sharply in response to weakening demand outside the US and inability to constrain supply. Poor growth is underlined by policy responses: extreme monetary measures in Japan and interest rate adjustments in China. In SA, year-to-date, bonds have now delivered a return slightly ahead of equity, and bond yields are lower than at the start of the year.