Trial now

A Benchmark Rate at 2% Would 'Not Be Excessive'


Yield curve shifts higher with 5s30s flattening


Austria lowers 2021 funding target

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

  • USD/ZAR trades +0.91% higher at the open, tracking the BBDXY and USD/CNH in early trading as mixed risk sentiment filters through from APAC.
  • The cross continued to drive higher on Friday, making a decisive break of the 50dma to move towards the 61.8% Fib (14.8864) of the 20 Aug-10Sept range. Price action remains bullish as we approach the SARB & FOMC this week, with ZAR among the most vulnerable in the high-beta space to rising UST yields.
  • The SARB is broadly expected to keep rates on hold this week, with inflation well contained within the target range. Although CPI is expected to tick up to 4.9% y/y in August, Gov Kganyago is likely to reiterate his focus on medium-term disinflationary vectors, which remain anchored around the midpoint of the 3-6% target range at 4.3-4.5%.
  • The FOMC will be the major focus in the aftermath of the SARB, with all eyes on the dot plot for signs of lift-off and the speed/frequency of hikes in 2024 which could precipitate additional volatility in the UST market.
  • The cross remains biased to the upside, but may get sticky around 14.88-15.08 – with ZAR fundamentals still relatively robust vs many others in the EM space.
  • Intraday Sup1: 14.7583, Sup2: 14.6577, Res1: 14.8864, Res2: 14.9781