ZAR: Rand Stabilises Ahead Of SARB Rate Decision Tomorrow

Spot USD/ZAR has oscillated around neutral levels, looking for fresh price catalysts. The pair last deals at 18.6975 and a break above Jan 13 high of 19.2296 could reignite bullish momentum. Meanwhile, support to watch is Jan 24 low of 18.3022.

• The Government of National Unity (GNU) seems to have averted an imminent political crisis as Democratic Alliance (DA) chief reaffirmed the party's commitment to the existing coalition. However, tensions continued to bubble as he demanded more open communication between coalition parties and called for changes to the National Health Insurance (NHI) legislation. Various contentious issues will likely be discussed during the cabinet legkotla, which kicks off today amid preparations for next week's SONA and next month's budget.
• SAGB yields have faltered across the curve as US Tsys trade on a firmer footing. South Africa's 5-year and 10-year breakeven inflation rates sit at 4.21% and 5.33% respectively, slipping further ahead of tomorrow's SARB monetary policy decision. Another 25bp cut is widely expected but it may be wrapped in cautious rhetoric amid lingering upside inflation risks. See our preview for more details, including a summary of sell-side views.
• The composite BBG Commodity Index has inched 0.1% lower, while the precious metals subindex is marginally higher.