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.
Executive Summary:
- SARB likely to tighten policy further, with CPI now above top-end of target range
- However, a number of sell-side analysts see a strong possibility for a larger hike of 75bps
- A 50bps move is fully priced, with a 75bps move around 40% priced
Full preview here:
In an interview with MNI in late June, SARB’s Naidoo acknowledged that the bank are in the midst of a tightening cycle, stating that “we are in the phase of taking out foot off the accelerator”. This makes a rate rise of at least 50bps a near certainty this week and would be inline with the pace established at the May rate decision.
Arguing against a 50bps rate rise this quarter, is the expectation that CPI will rise to 7.3% in June, opening the largest gap with the upper-end of the inflation target since the Global Financial Crisis. This is comfortably above model assumptions presented in May, which saw CPI averaging 5.9% this year, and saw core at just 3.9%.
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.