South African September inflation likely to rise

In South Africa consumer prices for September are on the agenda today. Last month the data provided a positive surprise for the South African Reserve Bank as prices remained stable mom. 

"Even though that is unlikely to be the case this month. A rise of 0.3% mom is expected, this will not put too much pressure on the SARB", says Commerzbank. 

Perhaps today's data might even provide an indication that the central bank's own inflation outlook is a little too high. Of course that would suit the SARB very well as it is struggling with rate hikes due to the weak economy. However, the rand is unlikely to be driven notably by the data. 

The market has priced in that the central bank will counter the rise in inflation with moderate rate hikes in any case. It will be so careful with its rate hikes though that the real interest rates are unlikely to become much more attractive. 

Only if inflation was to ease notably, contrary to the central bank's expectations, could notable ZAR positive momentum be expected.