Rand Ticks Lower Alongside Precious Metals After Breaching Key Resistance Levels Friday

Light risk-off flows pushed spot USD/ZAR above key resistance levels last Friday. The pair managed to catch a breather this morning close to its best levels in around five months. It still trades with modest bullish bias, adding around 300 pips so far to last change hands at 19.3446. From a technical point of view, bulls seem to have a clear path towards Oct 6 high of 19.6399. On the flip side, bears look for a pullback towards Feb 2 low of 18.5578.

• The commodity complex is marginally softer, with the BCOM Index hovering just above recent cyclical lows. The precious metals subindex underperforms, shedding 0.5% today.
• SAGB yields are slightly higher, curve runs slightly steeper. South Africa's 10-year breakeven inflation rate creeps higher for the third consecutive day, last operating at 6.52%, its highest level since February 15.
• The weekend brought some reprieve on the loadshedding front, with Eskom moving to Stage 2 power cuts, as some power stations replenished their emergency reserves. The utility said it will alternate between Stages 2 and 3 until further notice.
• President Ramaphosa said that the 2024 Budget sets South Africa on growth trajectory, while promoting fiscal sustainability and crucial developmental goals.