Podcast | SA FIC: Rand not cheap enough; maintain a weak bias.

By |2022-05-30T14:18:29+02:00May 27th, 2022|Markets and Research|

The rand may be much weaker now than a month ago, but it may not be cheap enough. At 14,50, we were better buyers of USD and although the rand has moved a lot in the past month, its weakness can extend much further. It’s too soon to get bullish on the rand. As a result, even though it is trading above our fair-value range, cyclically, we prefer to maintain a weakening bias.

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Podcast | Post-Budget Speech Webinar 2022

By |2022-03-01T00:25:51+02:00Feb 24th, 2022|Markets and Research|

The 2022 Budget Speech will be delivered in an environment with more certainty than what we experienced in 2021. While revenue collection may surprise to the upside, expenditure pressures in the form of additional social support, and state-owned enterprises bailouts do threaten to slow down the fiscal recovery. Our Markets Research Team will review the Budget and its impact on the rand, interest rates and growth.

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Podcast | SA FIC: US inflation impulse – pressure on SA contained

By |2022-03-01T00:31:44+02:00Feb 14th, 2022|Markets and Research|

The latest US inflation print may have increased doubts that South Africa can escape most of the inflationary pressures observed in the US. For one, it seems as if the FRA market believes South Africa will not be able to escape these pressures. The FRA market is currently pricing in 250 bps of hikes over the next two years, which, in our view, is consistent with inflation expectations closer to 6% by the end of next year. These inflationary pressures may arrive for South Africa, but our estimates suggest the US is unlikely to be the major source of such inflationary pressures.

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