Sales & Trading

Research evidence excerpt

Sales & Trading

Laoise Ni Thighearnaigh AC Sales & Trading J P M O R G A Nlaoise.nithighearnaigh@jpmorgan.com

JPMorgan Chase Bank N.A, London Branch 18 June 2026

EM FX

RUB Quiet day in usd/rub, where it edged marginally higher from 72.60 to 72.80. Even with the CBR

expected to cut 50 bps tomorrow and with the usd getting a boost from Warsh's hawkish Fed

debut it's hard to see usd/rub going up too much in the short term, such is the extent of local

hard currency supply.

ZAR Warsh and the Fed weren’t exactly easy to interpret yesterday, but I think it’s fair to say the tone

leaned more hawkish than the market expected. While that makes for a clear “US yields higher

and USD higher” trade versus currencies like EUR, CAD and CHF, I don’t think the dollar is a

clear buy against currencies like ZAR. I know this view might be a bit controversial—and

maybe I’m being a bit stubborn—but the US-Iran deal and the subsequent move lower in oil

(WTI is at $75 per barrel this morning) changes the macro landscape for EM. I think good

stories like South Africa, which will benefit materially from lower oil prices, should still do OK

in this environment. And while my book is heavily skewed toward USD longs right now, my

medium-term bias in ZAR is still to be long the currency. Turning to South Africa, May

inflation rose by less than expected to 4.5% (from 4.0%; consensus 4.7%). Our economists

believe most of the surprise was due to timing and temporary factors (public transport), so

around two-thirds of the miss will probably be made up in June. That said, our economists still

expect a 25bp hike in July, although the probability of a hold has risen as oil prices have come

off the highs significantly. We saw better demand for the currency after the CPI print from real-