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:
- The South African Reserve Bank are likely to tighten policy further at this meeting, but the pace of this quarter’s increase remains up for question
- Markets are fully priced for a 50bps move this week and are approximately 50% priced for a 75bps step
- A sizeable minority voting for smaller hikes could indicate that the front-loading phase of the cycle has now ended
Markets are already well priced for a sharp slowing in the pace of the tightening cycle next year, with the JIBAR-FRA spread compressing across 2023 and 2024 maturities, and it’s likely Kganyago leans into this pricing to outline the SARB view that inflation will slow next year, albeit alongside a more moderate pace of economic growth.
Feeding into this view is the expectation that the rise in CPI will have faded over October (data due November 23rd) to 7.4% Y/Y, while core CPI slows to 0.3% on the month – well below the rolling 12-month average. Additionally, fuel price gains are seen slowing into year-end, with CEF estimates pointing to a slower rise for petrol, and a fall in price for diesel for December.
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.