Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge 
Gold Shines on Oil Relief: Buy Dips at $4160, Targeting $4305 as Bullish EMAs Dominate 
3 clinical-grade skincare creams you really shouldn’t buy online 
S&P 500 Relies on Tech for Growth in Q4 2024, Says Barclays 
Stock Futures Dip as Investors Await Key Payrolls Data 
2025 Market Outlook: Key January Events to Watch 
Wall Street Analysts Weigh in on Latest NFP Data 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
‘Vibe coding’ is fun and easy, but there’s a major catch 
There are some technical positives for ZAR, which under normal circumstances may be sufficient to stabilize the currency, but amid end-of cycle concerns are probably not a good guide. For completeness, we review valuation and positioning below. Despite the small correction in March, the FX hedge ratio remains near record highs (refer 1st chart).
This suggests many real money investors are already pre-hedged for the upcoming downgrade risks. In addition, ZAR now screens 8.1% cheap in our BEER FV model, the lowest since September 2018 (refer 2nd chart). These technical positives somewhat reduce ZAR’s vulnerabilities.
The medium term outlook for ZAR remains very negative based on weak growth, prospects of much lower carry and a negative BoP dynamics. Yet, our risk appetite index has reached extreme low levels and ZAR is starting to screen cheap in our BEER FV model. As such we took profits on our bearish trades. Lacking directionality though momentum to keep USD/ZAR above 18.00 levels.
Consider a RUB – ZAR RV trade, supported by the earlier screener on skews: Sell 3M delta-hedged USDRUB 25D call @10.9/11.3 and hedge it with 3M delta-hedged USDZAR 25D call @16.325/16.725, equal vega. Courtesy: JPM
