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SAGB Yields Open Higher on Risk-Off; Markets Price In Tighter SARB

  • SAGBs open sharply higher this morning with yields up +16-21bp across the curve as risk-off remains the dominant theme.
  • Yields rose +29-32.8bp yesterday with weakness distributed evenly across the curve on the back of surging energy prices.
  • Implied market pricing via FRA1x4-jiba3m spreads also rose to +46.3bp vs +32bp at the start of March – signalling proinflationary concerns and expectations for a potential acceleration in the SARB’s hiking cycle.
  • Nevertheless, the SARB will be cognizant of crippling growth with more aggressive hikes when the shock is purely exogenous – making for a difficult upcoming meeting.

MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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