Rand Extends Its Dynamic Recovery

Spot USD/ZAR weakened into the European morning again, which has become a pattern in the recent days. The pair has now moved firmly below the ZAR19.00 figure and last trades at ZAR18.9492, down ~1,430 pips on the session. Bears look for further losses past the 50-EMA, which kicks in at ZAR18.8698. On the flip side, bulls keep an eye on Jun 1 high of ZAR19.9204.

• From a cross-asset perspective, SAGBs have found poise this morning, with yields easing across the curve and 10-year breakeven inflation rate dropping to 6.82%, its lowest point in more than three weeks. The BBG Commodity Index is little changed, with the precious metals subindex sitting ~0.4% above neutral level.
• President Cyril Ramaphosa is yet to announce his decision on whether South Africa will host the BRICS summit in August. News24 reported that the Cabinet received a legal opinion advising against the participation of Russian President Vladimir Putin, while the DIRCO has been "amenable" toward moving the event to China.
• South Africa's Q1 current account deficit was narrower than expected at ZAR66bn or 1.0% of GDP (median estimate was -ZAR182bn or -2.8% of GDP). The positive surprise came on the back of a wider trade surplus, underpinned by an increase in the value of gold and merchandise exports.
• Statistics SA will report April industrial output at 12:00BST/13:00SAST.