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Implied Vols Soar as High-Beta Risk Sentiment Sours

SOUTH AFRICA
  • USD/ZAR pulling lower at the open after failing to break 15.00.
  • All eyes remain firmly on UST yields as high-yield and commodity currencies get hit by a firmer USD.
  • Limited local data outside the trade balance (expected to decline from Dec high at R32bn), leaves the cross at the mercy of global risk sentiment and USD-side developments.
  • Implied volatility across EMFX has notched up substantially as a result of yesterday's price action and markets will remain on the cautious side before looking to re-allocate to outright EMFX longs, despite current levels being more attractive.
  • Commodities feeling the $ pinch: gold -0.65%, platinum -0.25%, while stocks track a weaker APAC session lower.
  • USD/ZAR sup1: 14.9078, Sup2: 14.7158, Res1: 15.0617, Res2: 15.2116
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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