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Market Research8.pdf

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07 November 2013

South Africa: Manufacturing Production
 Our economist is forecasting September manufacturing production to decline 3% mom, as
labor strikes in the motor vehicle and components sectors continued in the month. This is
below consensus forecasts for a 1.2% decline.
 We remain bearish ZAR and see scope for rand underperformance relative to its EM peers
as domestic data moderate and the currency remains susceptible to negative labor market

Brazil: Inflation
 Market consensus for October IPCA inflation is for 5.87% yoy, in line with the 5.86%
reading in September. We think the data will have minimal impact on FX, as markets are
more likely to focus on the broader impact of the stronger USD. A significant deterioration
in BRL would likely make the BCB more confident with regards to maintaining its USD
swap program, an option which was a more frequent object of debate when BRL was
trading closer to 2.10.

The Global Macro Pulse