Rand Inches Higher Despite Overall Weak Start To 2024

The rand edges ahead of its EMEA peers despite the absence of major local headlines. The pair deals at 19.1194, around 830 pips lower on the day, with bears looking for a continued move towards Jan 12 low of 18.5385. On the flip side, bulls look for an attack on Oct 26 high of 19.2710 and Oct 6 high of 19.6399. Note that the rand has been the second-worst performer in the EMEA space this year, despite today's uptick, with USD/ZAR showing above the 19.2 mark yesterday.

• BBG Commodity Index and the precious metals subindex have both added 0.4%, with both respecting the confines of recent ranges. SAGB yields sit a touch higher across the curve, with 10-year breakeven inflation rate ticking higher to 6.30%. South Africa's TTSE/JSE Africa All Share Index operates 1.2% above neutral levels.
• All eyes are on local inflation data and SARB rate decision, due over the next couple of days. All 18 economists polled by Bloomberg expect the central bank to keep the policy rate unchanged on Thursday, with the decision due to be made by a reduced four-member panel, due to the resignation of Deputy Governor Kuben Naidoo.
• Bloomberg circulated comments from Anchor Capital who believe that the rand's prospects have deteriorated and see USD/ZAR trading within the 18.75-20.00 range in 1Q2024. They note that "the rand [is] meaningfully weaker than our modeled fair-value range".
• South Africa auctions bonds maturing in 2031, 2037 and 2053 today.