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Eskom Risks Loom over ZAR, Risk Sentiment the Key EM Driver

SOUTH AFRICA
  • USD/ZAR Flat to lower at the open in line with USD/CNY price action.
  • Focus today on Eskom appeal, with a win for Eskom offsetting fiscal concerns but increasing upside risks to the inflation outlook.
  • USD/ZAR is occupying a broad range between 15.10-15.38, driven primarily by risk-on/off conditions - similar to TRY.
  • $-side factors dominating EM sentiment for now. Commodities mildly bid this morning after the run on silver boosted platinum as well (gold +0.10%, platinum +0.42%).
  • 1Y SA basis swaps trading at new highs of 115, while implied vols have ticked higher & 5Y CDS remains subdued at 230.77.
  • Res1: 15.3174, Res2: 15.3792, Sup1: 15.1544, Sup2: 15.0674
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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