Rand Underperforms EMEA Peers, PPI Due Shortly

Spot USD/ZAR has advanced into European morning hours despite U.S. dollar indices staying below the prior day's closing levels, with market participants digesting yesterday's budget speech and Eskom CEO de Ruyter's politically sensitive resignation.

• The rate operates at ZAR18.3408, up ~1,020 pips on the session. Bulls now set their sights on the ZAR18.5024-18.5815 zone which capped gains in autumn last year. Bears look for a pullback under the 50-EMA, which intersects at ZAR17.5538.
• From a cross-asset perspective, local-currency bonds last sit slightly below neutral levels, with South Africa's 10-year breakeven inflation rate moving away from yesterday's lows. The BBG Commodity Index is little changed, with the precious metals component ~0.5% worse off.
• Finance Minister Godongwana in his budget speech offered Eskom ZAR254bn worth of debt relief over the next three years in a bid to improve the utility's electricity generation capacity. At the same time, he outlined plans for a faster than expected fiscal consolidation.
• Eskom CEO de Ruyter stepped down with immediate effect after giving a television interview, in which he suggested that graft and theft involving high-profile ANC politicians are weighing on the utility's performance and warned that the record-breaking power outages might worsen.
• Local PPI data will be published at the bottom of the hour.