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ZAR: Rand Extends Gains, BER Survey Shows Moderation In Inflation Expectations

ZAR
EM BulletBulletEmerging Market News

Spot USD/ZAR refreshed one-month lows this morning and last changes hands at 17.6510, almost 500 pips lower on the session, as a bearish correction continues. The focus is on 17.2711, which limited losses on Nov 7. Conversely, bulls look for gains towards Nov 14 high of 18.3951.

  • Two-years ahead inflation expectations eased to +4.6% Y/Y in Q4, approaching the SARB's +4.5% target mid-point. The report comes on the heels of November CPI data, which showed that headline inflation ticked higher to +2.9% Y/Y, missing the consensus forecast and staying below the central bank's target range. These outturns support the case for continued monetary easing when the MPC meets in January. The rand has shown limited (if any) reaction to the BER survey.
  • SAGBs have retraced part of initial gains but yields remain in negative territory. South Africa's 5-year breakeven inflation rate sits at 4.22%, with 10-year counterpart last seen at 5.27%.
  • The composite BBG Commodity Index and the precious metals subindex have edged higher, albeit by very narrow margins. Gold trades just shy of neutral levels.
  • Statistics SA will release November PPI and Q3 non-farm payrolls at the bottom of the hour.
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Spot USD/ZAR refreshed one-month lows this morning and last changes hands at 17.6510, almost 500 pips lower on the session, as a bearish correction continues. The focus is on 17.2711, which limited losses on Nov 7. Conversely, bulls look for gains towards Nov 14 high of 18.3951.

  • Two-years ahead inflation expectations eased to +4.6% Y/Y in Q4, approaching the SARB's +4.5% target mid-point. The report comes on the heels of November CPI data, which showed that headline inflation ticked higher to +2.9% Y/Y, missing the consensus forecast and staying below the central bank's target range. These outturns support the case for continued monetary easing when the MPC meets in January. The rand has shown limited (if any) reaction to the BER survey.
  • SAGBs have retraced part of initial gains but yields remain in negative territory. South Africa's 5-year breakeven inflation rate sits at 4.22%, with 10-year counterpart last seen at 5.27%.
  • The composite BBG Commodity Index and the precious metals subindex have edged higher, albeit by very narrow margins. Gold trades just shy of neutral levels.
  • Statistics SA will release November PPI and Q3 non-farm payrolls at the bottom of the hour.