South Africa
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November 15, 2024
SARB MPC Preview: Easing Cycle to Continue on November 21
November 15, 2024 4:04 PM UTC
Bottom line: After South African Reserve Bank (SARB) cut the key rate to 8.0% on September 19 following seven consecutive meetings at a 15-year peak of 8.25% given that September inflation hit below the midpoint of target band of 3% - 6%, power cuts (loadshedding) are suspended and inflation expecta
October 30, 2024
Medium Term Budget Policy Statement Foresees Wider Budget Deficit but a Better Growth Prospect
October 30, 2024 5:21 PM UTC
Bottom line: The coalition government announced its first Medium-Term Budget Policy Statement (MTBPS) on October 30, setting government policy goals and forecasts over the next three years. According to MTBPS, South African Treasury sees consolidated deficit at 5% of GDP in the fiscal year ending in
October 28, 2024
BRICS Summit 2024: Kazan Declaration not a Game Changer
October 28, 2024 11:41 AM UTC
Bottom Line: The BRICS Summit, which was held in Kazan on October 22-24, was the first summit following BRICS has expanded to include Ethiopia, Iran, Egypt and the United Arab Emirates. Despite expectations, Kazan deceleration, which was a joint statement signed after the summit, is not a game-chan
October 23, 2024
Deceleration Trend Continues: South Africa’s Inflation Cooled to 3.8% YoY in September
October 23, 2024 2:29 PM UTC
Bottom Line: After inflation decreased to 4.4% YoY in August, the downward trend continued in September and CPI hit 3.8% YoY given suspended power cuts (loadshedding), a relatively stable Rand (ZAR), decrease in inflation expectations in Q3 coupled with Fed started cutting rates. Taking into account
October 18, 2024
South Africa: Medium Term Budget Policy Statement to be Announced on October 30
October 18, 2024 4:50 PM UTC
Bottom line: The coalition government will announce its first Medium-Term Budget Policy Statement (MTBPS) in Parliament on October 30, which is anticipated to set government policy goals and priorities and forecast macroeconomic trajectory and the fiscal framework over the next three years, includin
October 08, 2024
SARB in 2025: Rate Cuts Will Continue
October 8, 2024 5:25 PM UTC
Bottom line: After South African Reserve Bank (SARB) started cutting the key rate on September 19 and decreased it from 8.25% to 8.0% given fall in inflation below midpoint of target band of 3% - 6%, suspended power cuts (loadshedding) and deceleration in inflation expectation, we now foresee the ra
October 02, 2024
Markets: Rate Cuts or Geopolitics?
October 2, 2024 9:36 AM UTC
Israel will likely counteract Iran, which will prompt a further missile attack by Iran. However, our bias remains that Israel main aim is to have a buffer zone in southern Lebanon up to the Latani river and not fight a prolonged war with Iran. This limits the economic fallout globally and on oil
September 27, 2024
September 26, 2024
EM FX Outlook: Fed Easing Helps but Divergent Trends
September 26, 2024 8:00 AM UTC
USD strength is ebbing across the board, which provides a positive force for most EM currencies on a spot basis. However, where inflation differentials are large, the downward pressure will remain in 2025 e.g. Turkish Lira (TRY). Where inflation differentials are modest against the U.S., but
September 25, 2024
Outlook Overview: Rate Cuts But How Far?
September 25, 2024 7:30 AM UTC
· The U.S. economy is slowing, with the critical question being whether this is a soft or harder landing. Our broad analysis leaves us inclined to the soft landing view into 2025, though we shall watch real sector data closely over the next 3-6 months to check the trajectory. Else
EMEA Outlook: Rate Cuts Loading in 2025
September 25, 2024 7:00 AM UTC
· In Turkiye, we still foresee upside risks emanating from buoyant domestic demand, the stickiness of services inflation, and adverse geopolitical impacts leading average inflation to stand at 58.8% and 35.3% in 2024 and 2025, respectively. We think Central Bank of Republic of Turkiye (CBRT
September 19, 2024
Time Has Come: SARB Cut the Key Rate to 8.0% on September 19
September 19, 2024 3:57 PM UTC
Bottom line: As we expected, South African Reserve Bank (SARB) started cutting the key rate at the upcoming MPC meeting on September 19 and decreased it from 8.25% to 8.0% given recent fall in inflation, suspended power cuts (loadshedding) after March, deceleration in inflation expectations and a re
September 18, 2024
South Africa’s Inflation Dips Below Midpoint Target with 4.4% YoY in August
September 18, 2024 9:01 AM UTC
Bottom Line: After inflation decreased to 4.6% YoY in July due to slowdown in costs for food, fuel, housing and transportation, the downward trend continued in August and CPI hit 4.4% YoY given suspended power cuts (loadshedding), a relatively stable Rand (ZAR), decrease in inflation expectations co
September 15, 2024
Sep 27 Outlook Webinar: Rate Cuts But How Far?
September 15, 2024 10:30 AM UTC
Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4. This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed. European easing is underway, but how much further will central ba
September 12, 2024
Time Has Come: SARB will Likely Decrease the Key Rate to 8.0% on September 19
September 12, 2024 7:09 PM UTC
Bottom line: South African Reserve Bank (SARB) will likely start cutting the key rate at the upcoming MPC meeting on September 19 and decrease the rate from 8.25% to 8.0% given recent fall in inflation, suspended power cuts (loadshedding) after March, deceleration in inflation expectations and a rel
August 14, 2024
EM Markets Divergence with China Harder Landing Concerns
August 14, 2024 3:35 PM UTC
Global market turbulence has had a spillover impact into EM, but also some EM assets have benefitted from rotation away from the U.S. What are the prospects in the coming months?
We see scope for a 2nd wave of U.S. equity and Japanese Yen (JPY) correction, which are a mixed influence for EM assets
South Africa’s Inflation is Expected to Continue its Downward Trend in July
August 14, 2024 1:56 PM UTC
Bottom Line: After inflation decreased to 5.1% YoY in June due to slowdown in costs for food, fuel and transportation, we now foresee that the downward trend will continue in July and CPI will further slow down to 4.9% - 5.0% Yr/Yr given suspended power cuts (loadshedding), a stable Rand (ZAR), fall
July 30, 2024
South Africa’s Load Shedding Suspended for 121 Consecutive Days, but Risks Remain Alive
July 30, 2024 3:42 PM UTC
Bottom Line: Despite power cuts (load shedding) was a major headwind for South African economy in Q1, it appears the situation got better in Q2 as Eskom announced on July 26 that load shedding remained suspended for 121 consecutive days since March 26 reflecting an improvement in the reliability a
July 24, 2024
South Africa’s Inflation Slightly Eased to %5.1 YoY in June
July 24, 2024 11:25 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on July 24, CPI marginally decreased to 5.1% YoY in June due to slowdown in costs for food, fuel and transportation coupled with suspended power cuts (load shedding) in June. The inflatio
July 11, 2024
South Africa: Parliament to Open on July 18
July 11, 2024 9:41 AM UTC
Bottom Line: After African National Congress (ANC) and Democratic Alliance (DA) formed a government of national unity (GNU) along with other smaller parties, and president Ramaphosa announced the cabinet on June 30, South Africa should now quickly turn its attention to economic urgencies. The parlia
July 10, 2024
July 01, 2024
Coalition’s Determination will be Key for Narrowing South Africa’s Current Account Deficit
July 1, 2024 10:32 AM UTC
Bottom Line: Current account deficits (CAD) continue to be a major headwind for South African economy ignited by logistical constraints, power cuts (load shedding), and weaker external demand especially from China and the EU. We think CA will be still bolstered by a trade surplus in H2 2024, support
EM After the Elections: Fiscal Focus and Inflation Questions
July 1, 2024 8:05 AM UTC
Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil. India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip
June 26, 2024
June 25, 2024
Outlook Overview: Cyclical and Structural Forces
June 25, 2024 10:15 AM UTC
• The global economy is showing signs of healing, as inflation comes back towards targets and growth recovers momentum in some economies. Nevertheless, the cyclical headwind of lagged monetary tightening remains in DM countries, and will likely be one of the forces slowing the U.S. economy
EMFX Outlook: USD Strength to Ebb with Different EM Impact
June 25, 2024 8:05 AM UTC
We see Fed rate cuts from September starting to soften USD strength into year end and 2025. Beneficiaries will include currencies with inflation moving towards target and high real rates or, alternatively, undervalued currencies. This should benefit the Brazilian Real (BRL) and Indonesian Rupiah
June 24, 2024
EMEA Outlook: Stubborn Inflation Dominates
June 24, 2024 1:00 PM UTC
· In Turkiye, we expect Central Bank of Republic of Turkiye (CBRT) will likely halt the key rate at 50% until the end of 2024, which is our baseline scenario. We expect a fall in inflation likely after July due to favorable base effects, additional macro prudential measures, public savings
June 19, 2024
South Africa’s Inflation Stayed Stable at 5.2% in May
June 19, 2024 10:28 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on June 19, the inflation held steady at 5.2% YoY in May, unchanged from April due to suspended power cuts (load shedding) coupled with unchanged food and non-alcoholic beverages (NAB) pr
June 17, 2024
South Africa: ANC-DA-IFP-PA Coalition Will Run the Government
June 17, 2024 11:23 AM UTC
Bottom Line: As we predicted, African National Congress (ANC) and Democratic Alliance (DA) formed a government of national unity (GNU) with the ANC-lead on June 14, along with two smaller opposition parties, Inkatha Freedom Party (IFP) and Patriotic Alliance (PA). Lawmakers voted to put former presi
May 31, 2024
South Africa Elections: A Coalition Government is on the Horizon
May 31, 2024 3:03 PM UTC
Bottom line: As we forecasted in our previous pieces, it seems a coalition government with an ANC-lead will be formed following the presidential elections on May 29, according to the preliminary results. It is very likely that ANC will be losing its majority dipping below 50% as it is currently the
May 30, 2024
SARB Held the Key Rate Stable at 8.25%
May 30, 2024 3:06 PM UTC
Bottom line: As widely expected, South African Reserve Bank (SARB) kept the key rate constant at a 15-year high of 8.25% on May 30 despite inflation rate fell for a second consecutive month in April due to less severe power cuts (load shedding), a firmer South African rand (ZAR) coupled with lower f
May 23, 2024
Support to ANC is on the Rise
May 23, 2024 6:24 AM UTC
Bottom line: We continue to foresee two possible outcomes of South African presidential elections on May 29, either an African National Congress (ANC) win (40% probability) or a coalition government (60% probability). According to recent polls, ANC continues to be at the risk of losing its majority
May 22, 2024
South Africa’s Inflation Softened to 5.2% in April, the Lowest Reading in Four Months
May 22, 2024 10:54 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on May 22, the inflation eased to 5.2% YoY in April down from 5.3% in March due to less severe power cuts (load shedding), a firmer South African rand (ZAR) coupled with lower food and no
May 10, 2024
Asset Allocation 2024: Tricky Seven Months Remaining
May 10, 2024 1:06 PM UTC
Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects. Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields. However, 10yr U.S. Treasury yields wil
May 03, 2024
EMFX: Diverging On Domestic Forces Not Less Fed Easing Hopes
May 3, 2024 10:45 AM UTC
While U.S. economic developments, plus Fed policy prospects, will be important in terms of EM currency developments, domestic politics and fundamentals will also be decisive. These can keep the South Africa Rand volatile in the remainder of 2024, given the risk of a coalition government and African
May 01, 2024
South Africa’s Fiscal Outlook Under Spotlights as the Elections Are Approaching
May 1, 2024 6:45 PM UTC
Bottom line: South Africa policy makers remain concerned about government debt trajectory, large domestic and international financing needs and elevated country risk premium before fast-approaching elections on May 29. We think South Africa’s general government fiscal balance and debt trajectory w
April 26, 2024
Headwinds To Long-term Global Growth
April 26, 2024 9:30 AM UTC
Bottom line: While much focus is on the cyclical economic position to determine 2024 monetary policy prospects, the 2025-28 structural growth trajectory differs to the pre 2020 GDP trajectory for major economies. While global fragmentation has a role to play, aging populations are already having a
April 24, 2024
Sticky Inflation Causes Concerns over the Horizon
April 24, 2024 9:26 AM UTC
Bottom line: According to the Monetary Policy Review Report by the South African Reserve Bank (SARB) on April 23, the risk of higher inflation still remains and inflation returning to the midpoint of the target band is only expected in the last quarter of 2025. SARB highlighted in its report that ma
April 19, 2024
Recent Polls in South Africa: ANC’s Popularity Continues to Decline
April 19, 2024 1:14 PM UTC
Bottom line: We continue to foresee two possible outcomes of South African presidential elections on May 29, either an African National Congress (ANC) win or a coalition government. According to recent polls, ANC is at the serious risk of losing its majority dipping below 50%, even as low as 37% acc
April 17, 2024
South Africa’s Inflation Softened to 5.3% in March
April 17, 2024 11:38 AM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on April 17, the inflation softened to 5.3% YoY in March from a four-month high of 5.6% YoY due to lower food and non-alcoholic beverages (NAB), alcoholic beverages & tobacco, transporta
April 03, 2024
April 02, 2024
Asset Allocation: Pausing for Breath
April 2, 2024 9:00 AM UTC
Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to
March 27, 2024
Beware of Inflation: SARB Held the Key Rate Stable at 8.25%
March 27, 2024 3:26 PM UTC
Bottom line: As widely expected, South African Reserve Bank (SARB) kept the key rate constant at 8.25% on March 27. It appears the decision targeted to anchor inflation expectations around the target midpoint, and enhance confidence in achieving the inflation goal as SARB signalled that its fight to
March 26, 2024
EM FX Outlook: Domestic Drivers Key
March 26, 2024 9:01 AM UTC
In terms of spot EM FX projections domestic drivers remain critical, with a desire to avoid appreciation versus the USD for some countries. Fed easing in H2 2024 should however help EMFX more broadly and allow some recovery in spot rates (e.g. Indonesian Rupiah (IDR), South African Rand (ZAR)
March 25, 2024
EMEA Outlook: Elections Set the Scene in Q2
March 25, 2024 2:00 PM UTC
· Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how
