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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
SOUTH AFRICA
- Volatility sparked by sustained looting and violence in KZN and Gauteng has forced a sharp move higher in USD/ZAR 1w vols and 25D risk reversals – reflecting the escalating degree of uncertainty surrounding the unrest.
- 1w riskies now trading towards YTD highs, but well off March 2020 levels.
- The SANDF have been deployed to Gauteng and parts of KZN, but remain under pressure with the sheer number of protesters involved making the situation increasingly difficult to contain.
- No signs of extension into parts of East London as of yet, but the situation is far from under control or subsiding at this juncture.
- While most of the violence is concentrated around shopping centres, reports of opportunistic farm attacks and burnings are increasing – posing risks to food security in KZN, which is a key farming hub for the country.
- Ramaphosa has fallen short of the mark in terms of declaring a state of emergency, with opposition parties criticising his hands-off approach.
- EFF leader and members of Zuma's family have had criminal charges laid against them by the DA party for incitement of violence.
- USD/ZAR has lifted +2.70% since the open on Monday, finding resistance around 14.6790. Long-dated yields peaked at +19bp today and have retraced lower to hover around the +13bp mark.
- Economists say the destruction in the province are likely to cause acute supply chain disruptions and food shortages for the next few weeks as the crisis evolves.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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