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ZAR: Rand Ticks Higher Despite Poor S&P Global PMI Print

ZAR
EM BulletBulletEmerging Market News

USD/ZAR has edged lower and last trades at 18.6174, almost 600 pips shy of neutral levels. Downside focus is on Jan 24 low of 18.3022 and a hypothetical formation of a head-and-shoulders pattern would highlight increased odds of a bearish reversal. Conversely, bulls need a clearance of Jan 13 high of 19.2296 to prove that momentum is behind them.

  • The latest S&P Global PMI survey revealed a slow start to the new year for South Africa's economy. Headline index fell to 47.4 from 49.9 prior, indicating a higher rate of contraction. Weakness was particularly acute in the service sector. However, there were also some positive takeaways, particularly on supply and inflation.
  • Separately, China's Caixin Services PMI came in softer than expected at 51.0 compared with the consensus forecast of 52.4. Caixin Manufacturing PMI released a couple of days back also slightly undershot expectations.
  • SAGB yields stay lower, but off intraday lows, curve runs flatter. South Africa's 5-year and 10-year breakeven inflation rates sit at 4.29% and 5.45% respectively.
  • The BBG Commodity Index is little changed at typing. The precious metals subindex is up by 0.6%.
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USD/ZAR has edged lower and last trades at 18.6174, almost 600 pips shy of neutral levels. Downside focus is on Jan 24 low of 18.3022 and a hypothetical formation of a head-and-shoulders pattern would highlight increased odds of a bearish reversal. Conversely, bulls need a clearance of Jan 13 high of 19.2296 to prove that momentum is behind them.

  • The latest S&P Global PMI survey revealed a slow start to the new year for South Africa's economy. Headline index fell to 47.4 from 49.9 prior, indicating a higher rate of contraction. Weakness was particularly acute in the service sector. However, there were also some positive takeaways, particularly on supply and inflation.
  • Separately, China's Caixin Services PMI came in softer than expected at 51.0 compared with the consensus forecast of 52.4. Caixin Manufacturing PMI released a couple of days back also slightly undershot expectations.
  • SAGB yields stay lower, but off intraday lows, curve runs flatter. South Africa's 5-year and 10-year breakeven inflation rates sit at 4.29% and 5.45% respectively.
  • The BBG Commodity Index is little changed at typing. The precious metals subindex is up by 0.6%.