In addition to domestic growth and inflation trends, the outlook for South African financial markets, similar to other emerging market economies, will likely be dominated by four factors, namely: the pace of normalisation in US interest rates, growth and monetary policy dynamics in the eurozone, growth developments in China (large and to a lesser extent in other emerging market countries), and the outlook for commodity prices.
These developments appear to have set the tone for higher volatility in global markets and a possibly more challenging environment for emerging market economies, especially those whose private and public entities have borrowed heavily in US dollars in recent years and in some instances have invested in oil-related activities.