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:
- Likely to tighten policy further in September
- Moves come as CPI climbs further above the top-end of the inflation target
- Lower-than-expected GDP could split board once again
The South African Reserve Bank are likely to tighten policy further at this meeting, infitting with their stance switch to front-loading in July. The moves come as CPI climbs further above the top-end of the inflation target, touching 7.8% in July and 4.6% on a core basis. Despite the tightening bias, August inflation is expected to moderate, and a lower-than-expected Q2 GDP read will provide pause for thought among some of the SARB board.
Most sell-side analysts see a 75bps rise for September, although a minority see a smaller hike, with the likes of Credit Suisse forecasting a 25bps rate rise, while Barclays see a 50bps move. A 75bps move is almost fully priced for this quarter’s meeting, but pricing suggests a small probably of a 50bps move. Traders will also look to gauge the likelihood of further action at November’s decision via the vote split among the board and any suggestion of more sizeable rate rises down the line.
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.