Rand On Defensive Amid Cautious Mood

Spot USD/ZAR has crept higher and the Rand sits at the bottom of the EMEA scoreboard, with market sentiment staying cautious. The rate last deals at ZAR17.0374, up ~1,100 pips on the session. A clearance of Jan 6 high of ZAR17.4343 would allow bulls to take aim at Dec 1 high of ZAR17.9596. Bears see Jan 4 low of ZAR16.7815 as their initial target, a break here would open Aug 25 low of ZAR16.7102.

• The aggregate BBG Commodity Index has shed ~0.4% thus far, while the precious metals subindex is little changed. Gold has edged higher and last operates ~$4.5/oz better off.
• Local-currency bond yields are slightly higher across the curve. 10-year breakeven inflation rate printed its worst levels since Nov 24 but has now reversed losses and sits at 6.09%.
• South Africa's industrial output data will cross the wires later today. Elsewhere, the national COVID-19 panel will provide an update on the highly transmissible Kraken subvariant.