"Tomorrow is a big domestic data day for South African markets, with the CPI and retail sales data to be released. The slew of data could set the tone for Thursday's SARB interest rate decision and the Q4 risk tone. Investors come in knowing the July CPI printed 3.5% YoY, a 10-month high. While it remains within the 3-6% band, it stayed above the stated ambition to target around 3% over time rather than just the midpoint of the 3-6% range."
"While inflation expectations declined to a record low, a surprise in the data tomorrow could affect the South African markets. However, if CPI is softer than expected, the conversation could tilt back to gradual easing later in the cycle. The rand is holding a tight range near 17.35 against the USD and could remain relatively stable in the period leading to the central bank decision but could react to strong changes in inflation figures."
Tomorrow's CPI and retail sales releases will provide key domestic data for South African markets and could shape Thursday's SARB interest rate decision and the Q4 risk tone. July CPI printed 3.5% YoY, a 10-month high, remaining within the 3-6% band but above the long-run ambition near 3%. Inflation expectations declined to a record low, yet a surprise in upcoming data could move markets. A softer-than-expected CPI would support prospects for gradual easing later in the cycle. The rand trades near 17.35/USD and may stay stable ahead of the decision but could react to large inflation deviations. Equities may gain support from a softer policy outlook, while gold near record highs supports local miners and South African assets.
Read at London Business News | Londonlovesbusiness.com
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