Rand Loses Ground, Underperforms All EMEA Peers

Spot USD/ZAR regains poise after a sharp sell-off yesterday, tracking a change in sentiment towards the greenback, albeit with a certain lag on both swings. The pair's leg higher has been facilitated by the souring of risk appetite in the Asia session, as steps taken by Chinese regulators against quantitative funds applied pressure to local equities, while the looming release of some key data in the US and Europe exacerbated broader sense of caution.

• South African news flow fails to provide much in the way of notable catalysts. On a marginally positive note, Eskom reduced loadshedding to Stage 2, which will remain in force until further notice.
• Then this is being typed, USD/ZAR trades at 19.2290, up 1,321 pips on the day, with bulls looking for a break above Feb 23 high of 19.3899, followed by a move towards Oct 6 high of 19.6399. Bears keep an eye on Feb 21 low of 18.7622.
• SAGB yields are slightly higher across the curve, while 10-year breakeven inflation rate has ticked higher to 6.53%.
• The commodity complex is softer, with precious metals down 0.5% on the session.