Data likely to weigh on South Africa Rand

A wider than consensus Q3 15 current account deficit reading on Tuesday (consensus: -4.0%, prior: -3.1%) and given that the ZAR has weakened significantly in response to larger-than-expected deficit prints in recent months, it is believed that the ZAR could once again be particularly vulnerable to these data. 

October's manufacturing production is expected to print below consensus on Tuesday (consensus: -1.0% y/y, prior: 0.9% y/y) and considering that the manufacturing sector is one of largest contributors to overall GDP, such a downside surprise could ensure that the ZAR also falls victim to heightened growth concerns during the first half of the week and as a consequence the ZAR could fall to fresh record lows. 

ZAR weakness could temporarily abate if Wednesday's local CPI data (consensus: 4.8%, prior: 4.7%) surprises to the upside, because such an outcome could heighten expectations that the SARB will hike policy rates by a further 25bp to 6.50% at the January MPC meeting.