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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.
SOUTH AFRICA
- Standard Bank economists released a note this morning, saying that a decision to keep rates on hold at 3.5% could prove costly for ZAR – which could move past 16.00 vs the $ on the back of a less risk-friendly backdrop.
- Market expectations remain split going into the meeting, but its worth noting that in the past five years the MPC has never moved directly to a hike from a unanimous consensus. This aligns with our base case for this meeting of a hold, but we will be keeping a close eye on the MPC split.
- A move higher in the currency towards or beyond 16.00 into year end, accompanied with increased headline inflation towards the upper band of the 3-6% target range may be the straw that finally breaks the camel's back in January for a +25bp hike.
- However, this will remain largely dependent on the trajectory of oil prices and the US battle with OPEC over the release of further supply.
- Kganyago's guidance at this meeting will be a key indicator of the room to hike in 1H22 – with 3x6 FRA-Jibar spreads now reflecting a more palatable picture of +50bp in hikes over a 3-6m horizon vs +70 last week.
3x6 FRA-Jibar Spread
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
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.
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