Yesterday’s slight decline in the April inflation print relative to the March outturn saw the market’s implied chance of a 50 basis point hike by SARB today pare back slightly. However, market pricing now suggests that the hiking cycle is unlikely to be over, even if SARB hikes by 50 basis points today.
Footnote
The accuracy of these estimates can be affected by time-varying term premia in the JIBAR and FRA rates of different maturities. South Africa does not have an overnight rate overnight indexed swap market, which would help improve the accuracy of estimates of market pricing the probability of a policy rate change at a specific date.
