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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.
SOUTH AFRICA
- GBP/ZAR has traded choppily since the las week of November as a result of idiosyncratic risks on both sides of the fence, combined with more challenging global risk conditions.
- The UK’s travel redlisting over the Omicron variant saw ZAR offered ahead of peak tourism season, while the UK’s plan B restrictions package dented sentiment in sterling.
- Moreover, question marks over the start of the UK’s hiking cycle continue to drive GBP-side volatility with markets pushing back expectations to February, while the SARB is expected to incrementally raise rates in 2022 to avoid falling behind the curve as the Fed normalizes policy.
- Despite having the 2nd highest real yield/carry in the EM space, ZAR’s high-beta nature has left it exposed to more challenging global risk conditions with markets pricing in 2-3 Fed rate hikes in 2022, and broadly expecting a faster taper than previously anticipated.
- SA’s terms of trade have also been choppy since mid-November, standing roughly 18% short of the October highs, but 20% above the 11 Nov lows.
- For now the cross remains pegged in its bull channel pattern established on 09 Sep, having retested the lower trendline & 50dma on 8/9 Dec.
- A close above the 21.50 level is needed to bring the prior highs and bull channel upper trendline into focus at 21.768, while key support stands at 20.9564 & 20.6436
Citi SA Terms of Trade Index
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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