There has been a major shift in interest rate expectations, with the professional market bringing forward the timining of anticipated rate cuts.

With some conviction, investors now anticipate that the SARB will be well justified in reducing interest rates in May by 25bp as the first cut of several.

Conviction on rate cut probabilities then weakens slightly through July reflecting the uncertainty of whether consecutive rate cuts are justified, although thereafter, conviction ramps back up again.

By the end of the year, there is reasonable conviction that rates will be reduced by approximately 75bp, with an outside chance of four 25bp cuts depending on the global economy’s performance in H1 2024.