Rand Finds Poise, Cabinet Strategy Meeting Begins

Spot USD/ZAR has eased off after probing the territory above Jan 6 high of ZAR17.4343 yesterday, with light greenback underperformance weighing on the pair this morning. It last operates at ZAR17.3442, down ~640 pips on the day. The key near-term layer of support is provided by Jan 26 low of ZAR17.0133, while bulls look for a rally above Dec 13 high of ZAR17.7601.

• Local-currency bond yields are lower across the curve, with South Africa's 10-year inflation breakeven rate last seen at 5.85%, with recent one-year lows in sight. The FTSE/JSE Africa All Share Index has added ~0.6% so far but is yet to test the all-time highs printed last week. The commodity complex is slightly weaker on the day, with precious metals down ~0.6%.
• South Africa's Absa Manufacturing PMI was little changed at 53.0 in January (prev. 53.1), printing above the expected level of 52.1. The index tracking expected business conditions climbed to an 11-month high, as local factory managers were optimistic about the global economic outlook, despite South Africa's record-breaking energy rationing.
• All eyes are on the Cabinet lekgotla beginning today, with declaring a national state of disaster expected to be among the key items on the agenda. Leaders may also debate the imminent Cabinet reshuffle.