SOUTH AFRICA: SARB To Implement New Monetary Policy Framework From June 8
May-27 15:55
SARB To Implement New Monetary Policy Framework From June 8 (BBG)
- Details:
- In November 2021, the South African Reserve Bank (SARB) released a consultation paper on a new monetary policy implementation framework (MPIF) for South Africa. Following an extensive consultation process, including engagements with domestic stakeholders and both local and foreign experts, the SARB is ready to implement a new MPIF.
- The Monetary Policy Committee (MPC) makes decisions on interest rates and the MPIF is the mechanism through which these decisions are made effective and transmitted through the South African economy.
- The amendments to the framework are technical in nature and will affect how monetary policy is implemented but will not affect the inflation target range or the interest rate decisions of the MPC.
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OUTLOOK: Thursday Data Calendar, Weekly Claims, GDP, KC Fed Mfg, 7Y Note Sale
Apr-27 15:44
- US Data/Speaker Calendar (prior, estimate)
- Apr-28 0830 Initial Jobless Claims (184k, 180k)
- Apr-28 0830 Continuing Claims (1.417M, 1.400M)
- Apr-28 0830 GDP Price Index (7.1%, 7.2%)
- Apr-28 0830 GDP Annualized QoQ (6.9%, 1.0%)
- Apr-28 0830 Core PCE QoQ (5.0%, 5.5%)
- Apr-28 0830 Personal Consumption (2.5%, 3.5%)
- Apr-28 1100 Kansas City Fed Manf. Activity (37, 35)
- Apr-28 1130 US Tsy $35B 4W, $30B 8W bill auctions
- Apr-28 1300 US Tsy $44B 7Y Note auction (91282CEM9)
US EURODLR OPTIONS: BLOCK, Sep Combo Cross
Apr-27 15:32
- 10,000 Sep 97.50 combo at .25 (calls over) vs. 97.50/100.1% at 1128"35ET
GBP: Options Flag Further Downside Risk For GBP/USD
Apr-27 15:27
- Options markets picking up on GBP weakness in a similar fashion to spot, with 3m risk reversals tilting back below 2 points in favour of puts today - which will mark the lowest close since mid-March and the initial Russian invasion of Ukraine.
- This steepens the SMILE curve further in favour of OTM puts, with the curve shifting considerably over the past week as spot GBP/USD slides and flagging further downside risks in the pair.
- On a fundamental basis, GBP is now the second most undervalued currency in G10 (with JPY in the bottom spot) using a BEER model, which gauges GBPUSD as over 20% undervalued relative to fundamentals.
- Wednesday's move proves that markets remain happy to sell the pair despite technically oversold signals. Earlier this week, the 14d RSI flagged that the pair was most oversold since March 2020 and the initial wave of COVID - but the pair has shown few signs of bottoming out.
- Key supports to watch include 1.2495 (61.8% retracement of the Mar 2020 - Jan 21 bull leg) as well as 1.2423.
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