Rand Back To Flat, CPI Data Under Microscope

Spot USD/ZAR edged lower early on, albeit it then reversed losses, with South African CPI data drawing attention. The pair trades flat at 18.9066 and bears look for losses past Feb 2/Jan 12 lows of 18.5578/18.5385, while bulls see Feb 14/Jan 22 highs of 19.1912/19.2180 as their initial targets.

• South Africa's headline inflation ticked higher to +5.3% Y/Y in January from +5.1% prior versus +5.4% expected. Core inflation went up to +4.6% Y/Y from +4.5%, where it was expected to stay. The SARB prefers to anchor inflation and core inflation at the +4.5% Y/Y mid-point of its target range, with the Governor repeatedly insisting that the job of taming price pressures is not yet done.
• SAGBs are slightly firmer, with 10-year breakeven inflation rate last sitting at 6.42%. The composite BBG Commodity Index operates 0.2% higher on the day as oil futures have come under pressure. The precious metals subindex is just slightly worse off on the day.
• President Cyril Ramaphosa set the date for the national and provincial elections for May 29, with the ruling ANC preparing for an uphill battle to keep its sole majority in parliament.
• Reminder that Finance Minister Enoch Godongwana will present the 2024 budget in parliament at 12:00GMT/14:00SAST.