South Africa’s inflation declined further in July, but the drop in headline inflation was smaller than expected. Read our comment.
Yesterday, the Polish central bank decided in favour of unchanged interest rates with the key policy rate on hold at 3.50%. Read our comment.
Another strike is underway in South Africa after more than 20,000 workers from Impala Platinum, the world’s No. 2 producer of metal, rejected the latest wage increase offer. The workers are asking for a 13% wage increase deal including housing and transport pay.
Preview
A rather light calendar for economic data releases today. We will get final Q2 GDP figures from Lithuania today. Hungarian unemployment will likely rise further with consensus expecting July’s unemployment to inch up to 9.7%, from June’s 9.6%. Producer prices in South Africa for July should show deeper disinflation.
Trading update
Most of the EMEA currencies proved rather volatile on Wednesday. After the positive morning start supported by the strong overnight performance of Asian equity markets, most EMEA currencies gave back their early gains. Even the better-thanexpected outcome of Germany’s Ifo sentiment index, which would otherwise push CEE currencies stronger, did not help the CEE FX to rebound. Also the South African rand, which was in early trade pushed stronger on the back of a higher gold prices, lost ground in the afternoon.
As the EMEA calendar lacks any “market mover data”, the direction for EMEA markets will be decided by the performance of equity markets and risk appetite in global financial markets.
