The South African JSE rebounded after being down in April with the JSE Capped Swix returning a gain of 0.5% as it rallied alongside global markets in the last few days of the month, getting its way back into positive territory from a 6% MTD drawdown.

The local banks were among the best performers, while general retailer stocks struggled, ending down on average around 5%. In May, miners were mixed, with diversified miners rallying as industrial metal prices staged a recovery on the prospect of Chinese stimulus and economic normalisation post the zero-COVID policy lockdowns.

The SA rand rallied slightly against the US dollar as the dollar weakened against most currencies. S&P Global Ratings affirmed SA's sub-investment grade rating in May but unexpectedly upgraded the outlook from stable to positive as structural reforms, contained fiscal expenditure, and favorable terms of trade may ease the country's fiscal and external pressures.

The SA Reserve Bank (SARB) kept pace with the US Federal Reserve (Fed's), doubling the rate hikes with a 0.5% rate increase announced at its meeting in May as it sought to get ahead of inflationary pressure.

SA's most recent inflation data (for April), released the day before the SARB meeting, saw headline inflation in the upper band of the SARB's target inflation range. Still, signaling that the volatile food and energy components were the biggest inflationary culprits, core inflation of 3.9% remained below the midpoint of the SARB's target range.

The SA 10-year government bonds yield followed global yields marginally lower during
the month but remained above 10%.

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