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Rand Unfazed By Domestic Inflation Data

ZAR

Spot USD/ZAR has oscillated slightly above neutral levels, showing a muted reaction to marginally better than expected South African CPI data. The pair last deals at 18.9395, with bulls looking for gains towards Feb 23 high of 19.3899. On the flip side, bears see Mar 13 low of 18.5066 as their initial target.

  • Headline inflation accelerated to +5.6% Y/Y in February from +5.3% prior, beating the +5.5% consensus forecast. Core inflation quickened to +5.0% Y/Y from +4.6%, printing above the +4.9% Bloomberg median estimate. This comes after a new BER survey showed that 2024 inflation expectations fell 0.3pp to +5.4% Y/Y. The SARB - which holds a monetary policy meeting next week - wants to anchor all of these metrics at the +4.5% Y/Y mid-point of its target range.
  • The BBG Commodity Index has shed 0.4% this morning, with precious metals down 0.2%, as gold loses shine versus the outperforming greenback.
  • SAGB yields are lower across the flattened curve, 10-year breakeven inflation rate sits at 6.77%, moving away from yesterday's fresh cyclical highs (6.84%).

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