So, that was the year it was – an unprecedented rollercoaster that shook the world to levels described as, if not worse than, the second world war.
In itself, a seismic shift that will probably have us talking about the pre-Covid and post-Covid era.
As we look forward to re-building our societies and economies towards a new ‘norm’, certain risks inherent to the financial world will continue to be with us.
Stimulus packages and rebound in growth are on the cards. This will put upward pressure on inflation, and in turn, upward pressure on interest rates.
You’ve seen how the yield curve has bounced up and down and taken different shapes and forms. Currencies and commodities have reached historical trading levels, and with oil futures trading in negative territory at some point.
Interest rates, particularly in South Africa, have reached historical lows and we are starting to see some upward pressure on the yield curve.
I couldn’t imagine being unhedged in markets like this. No one knows what sort of surprises there will be in the new year. Or, where interest rates are really going.
Of course, some of these risks are not to be worried about when hedged by Investec Treasury Sales and Structuring.
Till we meet again (hopefully in person in the new year), we wish you a blessed and restful festive season.