Rand Takes Cues From Gyrations In Risk Sentiment

Spot USD/ZAR has erased most of its earlier gains by this point, closely tracking the BBDXY Index on its round trip. The move was driven by global geopolitical risk, as Israel reportedly launched a missile strike against an Iranian military site in Isfahan. The strike appeared to be limited in character and was downplayed by Tehran, with an unnamed senior Iranian official telling Reuters that there are no immediate plans for retaliation.

• When this is being typed, spot USD/ZAR trades at 19.2030, still almost 500 pips higher on the day. A clean break above Feb 23 high of 19.3899 would send a bullish signal. Bears look for losses towards Apr 9 low of 18.4131.
• Finance Minister Godongwana said that the future drawdowns from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA) will not be spent on Eskom and Transnet but rather used to reduce the debt burden. He noted that he was mulling tax hikes and expenditure cuts in the 2025/26 budget as fiscal consolidation must be done "far away from the election."
• SAGB yields have climbed across the curve, with 10-year breakeven inflation rate creeping higher to 7.06%. As a reminder, the National Treasury will auction inflation-linked debt today.
• Bloomberg's gauge of precious metals strength has now given away its initial gains, as gold moved in sync with wider risk sentiment.