The January US payrolls data came as a surprise. The outcome drove US Fed funds futures higher, and the entire domestic FRA curve was paid higher in response. Investors have scaled back their expectations of earlier rate cuts, although by mid-year, expectations are high that the SARB will have reduced rates at least once, by 25bp.

A further three rate cuts are still priced in beyond that, with the market expecting just more than 100bp worth of cuts through the rest of the year ahead. Of course, achieving this would require ZAR stability and a shift in tone and aggressive easing cycle from the world’s major central banks.