Ceemea Week Ahead Sarb Hike And Economic Updates

Goldman Sachs forecasts a 25bp rate hike from the SARB, while the BoI and MNB are expected to remain on hold. Macro focus remains on rising energy-driven inflation in Poland and Kenya and a potential sovereign rating upgrade for South Africa.

Key Takeaways

• 1.The South African Reserve Bank (SARB) is expected to hike its policy rate by 25bp to 7.00% to maintain a real rate buffer despite oil-driven inflation shocks.
• 2.The Bank of Israel (BoI) is likely to stay on hold at 4.00% due to geopolitical uncertainty, despite a strengthening Shekel and soft inflation.
• 3.Goldman Sachs is bullish on South African Government Bonds (SAGBs), expecting yields to compress as the country restores fiscal credibility.

Table of Contents

• Israel: In a Close Call, We Expect the Bol to Remain on Hold
• Hungary: MNB on Hold, While Flagging the Possibility of a June Cut
• South Africa: 25bp Rate Hike, Albeit with Some Risk of a Hold
• Poland: Headline CPI to Rise from +3.2% to +3.4%yoy in May, Driven by Transport Fuels
• Kenya: CPI to Increase by 0.6pp to +6.2%yoy in May
• South Africa: Constructive on SAGBs as Authorities Restore Fiscal Credibility

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