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Next Emerging Market Shock Comes From South Africa Which Unexpectedly Hikes By 50 bps

Tyler Durden's picture




 

First it was Turkey defending itself tooth and nail against Bernanke's tapering, now it is South Africa, just as we predicted less than an hour ago.

  • SOUTH AFRICA RAISES BENCHMARK RATE TO 5.50% FROM 5.00%; EXPECTATION WAS FOR UNCHANGED
  • SOUTH AFRICA CENTRAL BANK RAISES BENCHMARK RATE
  • RAND STRENGTHENS AS CENTRAL BANK UNEXPECTEDLY RAISES REPO RATE
  • S. AFRICA'S MARCUS SAYS MOVE NOT INTENDED TO AFFECT RAND
  • S. AFRICA'S MARCUS SAYS HAVE A FLEXIBLE EXCHANGE RATE

Naturally, the ZAR surges... for about 10 milliseconds, after which it promptly drops to a level weaker than pre-announcement!

 

Full statement:

 

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Wed, 01/29/2014 - 09:33 | 4379266 unrulian
unrulian's picture

tic toc bitchez

Wed, 01/29/2014 - 10:16 | 4379440 Pool Shark
Pool Shark's picture

 

 

Rand strengthens???!!!

http://www.kitco.com/gold_currency/index.html?currency=zar&timePeriod=d&flag=exchangeRate&otherChart=no

"You keep using that word, I do not think it means what you think it means."

Wed, 01/29/2014 - 09:34 | 4379271 firstdivision
firstdivision's picture

I bet you GS prop desk knew about the rate hike.

Wed, 01/29/2014 - 10:14 | 4379432 eurogold
eurogold's picture

......and will profit from the same thing happening in the EM Countries around the World

Wed, 01/29/2014 - 09:36 | 4379273 new game
new game's picture

TREND YOUR FRIEND rate hikes to counteract taper, bullets next..

Wed, 01/29/2014 - 09:36 | 4379277 Sufiy
Sufiy's picture


Jim Rickards: The Macro View: Meet Janet Yellen, central planner

With the world's markets holding their breath about the FED's decision tonight it is very timely to follow Jim Rickards with his analysis on what to expect from Janet Yellen now. With Gold holding at the crucial breakout level now, it will be very important whether the recent turmoil in the emerging markets and sell off in the US markets will put the unease among the FED for Bernanke's clean exit despite of the growing misalliances in the markets.
  Gold market is showing the further signs of extreme levels of leverage in the Gold Fractional Reserve System and more evidence of the shortages in the physical Gold available for delivery. There are reports that JPMorgan Losses 44% of Gold Inventories in 4 Days.

 

http://sufiy.blogspot.co.uk/2014/01/jim-rickards-macro-view-meet-janet.h...

Wed, 01/29/2014 - 11:12 | 4379651 max2205
max2205's picture

This smells of coordinated action....

Wed, 01/29/2014 - 11:16 | 4379660 TruthInSunshine
TruthInSunshine's picture

Push the button, Max!

Wed, 01/29/2014 - 13:21 | 4380302 StychoKiller
StychoKiller's picture

"More brandy!"

Wed, 01/29/2014 - 09:37 | 4379279 Spitzer
Spitzer's picture

after which it promptly drops to a level weaker than pre-announcement!

This is to be expected. This will also happen in the US when Yellen tries to slow down inflation in 15 minutes. Traders are too dumb to realize this.

Wed, 01/29/2014 - 09:40 | 4379289 fonzannoon
fonzannoon's picture

Maybe..but the way I see it, if this were to play out, starting with EM...if capital truly started to flee to percieved safety....the dollar would end up being massively bid and the 10yr would be negative. 

Wed, 01/29/2014 - 09:53 | 4379338 Panem et Circus
Panem et Circus's picture

I think you're right... At least until they figure out that the USD isn't exactly safe either

Wed, 01/29/2014 - 11:04 | 4379623 Watson
Watson's picture

I agree.

In addition, IMHO, (bulk) gold would also be down quite sharply (in USD terms).
However, a good business to be in would be minting gold coins from bar (no tricks, proper weight and quality etc.), target market being the locals of these countries.

Watson

Wed, 01/29/2014 - 09:37 | 4379280 youngman
youngman's picture

Is this the start of the currency wars.....stay tuned...could get exciting...especially if you are traveling

Wed, 01/29/2014 - 09:48 | 4379319 Schlomo Bergstein
Schlomo Bergstein's picture

Begun, the currency wars have.

Wed, 01/29/2014 - 09:57 | 4379352 negative rates
negative rates's picture

Actually it is the end, but we described so it sounded like the start, just to fake out the competition.

Wed, 01/29/2014 - 09:48 | 4379316 stant
stant's picture

meanwhile there are 2 pins out there. one for bubbles ,the other for grenades

Wed, 01/29/2014 - 09:50 | 4379325 Panem et Circus
Panem et Circus's picture

But wait, why are interest rates going up? TPTB said we were deflating not inflating...

Wed, 01/29/2014 - 11:15 | 4379657 max2205
max2205's picture

Goog and amzn er should show the real next market move....a ruse by any other color

Wed, 01/29/2014 - 09:56 | 4379348 tawse57
tawse57's picture

All I want to know is whether this is going to spread to the EU, UK and US. I hope this gets out of control very quickly.

Wed, 01/29/2014 - 09:57 | 4379359 Silver Garbage Man
Silver Garbage Man's picture

So many fuses lit....so little time.

Wed, 01/29/2014 - 14:00 | 4380490 MagicMoney
MagicMoney's picture

Well since the US dollar is the reserve currency, other currencies essentially have to move with the USD to preserve "stability". THey essentially adopt the US monetary policy. Federal Reserve debases the currency, other central banks follow. The Fed tapers, other central banks taper.

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