Rand Trims Losses But Energy Crisis Worry Remains

South African assets have retraced the bulk of their reaction moves to an analytical note from Moody's, who warned against risks to the country's growth. Spot USD/ZAR topped out at ZAR18.0873 before easing off and last trades at ZAR17.9780, up ~1,200 pips on the session. Familiar technical levels remain in play.

• Local-currency bonds have moved away from earlier lows, gradually recouping their initial losses. Yields now sit just 1.7-2.8bp above neutral levels, with South Africa's 10-year breakeven inflation rate little changed at 6.08%.
• The BBG Commodity Index has shed ~0.5%, with the precious metals subindex seen ~0.5% worse off. Weak performance of the commodity complex has not prevented the Rand from trimming earlier losses.
• That being said, the South African Rand remains the worst EMEA performer today, as growth concerns surrounding the country's ongoing energy crisis continue to linger.