Rand Appreciates Before Release Of Local GDP Data

USD/ZAR continues to unwind its post-SARB spike to new all-time highs and has already reached levels from before the May 25 monetary policy decision, although it struggles to retrace the earlier upswing driven by the "Lady R incident." The pair last changes hands at ZAR19.2129, down ~640 pips on the session. A break below ZAR19.1352, which limited losses on May 24, would allow bears to seek further losses towards May 16 low of ZAR18.9945 and May 2 high of ZAR18.5075. Conversely, bulls look for a renewed attack at the psychological ZAR20.00 figure.

• South Africa's FRA curve has been under pressure at the start to the month alongside SAGB yields. Local-currency bonds have extended gains this morning and are firmer across the curve, with 10-year breakeven inflation rate easing to 7.06%.
• Investec Chief Economist Annabel Bishop wrote that the rand's recent losses came on the back of "SA’s perceived move away from neutrality to support for Russia," as the "past month has revealed the strong relationship SA’s government is reported to have with Russia on many fronts."
• The aggregate BBG Commodity Index has shed ~0.4% thus far, but the precious metals subindex is little changed on the day.
• South Africa's Q1 GDP data will cross the wires at 10:30BST/11:30SAST.