10-Year Inflation Breakeven Sentiment

Nedbank has revised its outlook for domestic economic output in 2026, reflecting a cautious stance in light of a mixed economic environment observed during the first five months of the year.

The bank's adjustment comes as South Africa grapples with rising inflation, prompting expectations that the central bank will maintain interest rates at their current levels. This development arrives against a backdrop of extreme sentiment in the market, with an adjusted sentiment score of 96 indicating a prevailing atmosphere of extreme greed, despite a coverage trend of 4 suggesting a period of extreme fear among investors.

The recent rate of change in economic indicators has shown a slight decline, with a three-month rate of change at -0.0395, further complicating the economic landscape and highlighting the challenges facing both policymakers and market participants as they navigate these turbulent conditions.