Weekly outlook for ZAR: Barclays

Quotes from Barclays Capital:

-It will be an eventful week for SA markets. On Tuesday, Q1 2015 GDP will be published, and given that we are softer than consensus (Barclays: 3.5% q/q, market median: 3.8% q/q) implies that the ZAR could fall victim to persistent concerns surrounding SA's relative sluggish economic recovery.

-We expect Wednesday's Budget speech to be largely market neutral, and Treasury is also unlikely to make any significant changes to the country's existing exchange control regulations.  We are in line with consensus with regard to Thursday's PPI reading for January (Barclays 4.7% y/y, market median: 4.7%), but because the risk lies in a softer-than-expected print, the ZAR could actually strengthen if a benign inflation reading entices foreigner investors to buy SA bonds.

-Conversely, we expect the ZAR to be particularly vulnerable to  Friday's trade balance reading for January (Barclays: 14.8bn deficit, market median: 8.1bn deficit) because such a print could serve as reminder of SA's onerous external funding requirements.