Rand Consolidates Losses Amid Post-US CPI & Geopolitical Musings

Spot USD/ZAR has has stabilised, consolidating decent gains registered yesterday on the back of above-forecast US CPI data, which poured cold water on global rate-cut bets. The pair sits at 19.1440, with bulls looking for a clearance of Jan 22 high of 19.2180, which would open up Oct 6 high of 19.6399. On the flip side, bears see Feb 2/Jan 12 lows of 18.5578/18.5385 as the initial layer of support.

• The latest geopolitical headlines point to further potential sources of tensions with South Africa's Western partners: Pretoria filed another legal complaint with the ICJ over Israel's actions in Gaza; the ANC said that its Secretary General Mbalula will travel for a partisan conference in Moscow; South Africa said it will host Iranian President Raisi for a state visit later this month.
• SAGB yields are slightly lower across the curve, albeit 10-year breakeven inflation rate sits higher at 6.54% after printing best levels in two months at 6.57%. The BBG Commodity Index has shed 0.4%, falling to new cyclical lows, with the precious metals subindex slipping 0.3% this morning in the wake of a 1.7% slump yesterday.
• SocGen said that South Africa's local-currency bonds look attractive now, with inflation set to slow towards the mid-point and the SARB set to cut rates from Q2/Q3, even as fiscal risks remain in place.
• Looking into the local docket, South Africa's retail sales data will be released at 11:00GMT/13:00SAST.