Rand Reverses Gains, Retail Sales Disappoint

Spot USD/ZAR has unwound its initial losses after briefly testing the water below the 19.00 figure today. A weaker-than-expected outturn for June retail sales may have pressured the rand to a degree, with the release followed by a brief and limited uptick in USD/ZAR. Retail sales shrank by 0.9% Y/Y after a revised 1.6% decline in May, while seasonally adjusted retail sales rose 0.2% M/M after a revised 0.9% drop. When this is being typed, USD/ZAR trades at 19.1945, up ~460 pips on the session.

• News24 reported that a key piece of legislation aiming to resolve South Africa's energy crisis is facing delays in being introduced to parliament, raising the risk that it will not be approved by the year-end. The Electricity Regulation Amendment Bill would establish an independent entity that will enable a competitive electricity trading market.
• The FTSE/JSE Africa All Share Index has shed ~1.1%, losing altitude for the fourth consecutive day. SAGBs trade on a softer footing, with 10-year breakeven inflation rate last seen at 6.76%. Note that the Treasury said that it will be re-opening the 2028 inflation-linked bond as an additional funding tool for the rest of the fiscal year.