Rand Weakens In Extension Of Post-NFP Move

Spot USD/ZAR has edged higher into the European morning, extending gains registered Friday on the back of a notable beat in US NFP data. The pair last deals at 18.9736, around 740 pips better off, with bulls looking to attack Jan 22 high of 19.2180. Initial support to watch is Jan 12 low of 18.5385.

• Local headline flow revolves around the upcoming elections, with opinion polls cementing the view that the ANC will struggle to keep its majority in parliament and might need to seek a coalition partner. President Cyril Ramaphosa will deliver his State of the Nation Address (SONA) on Thursday and may announced the date for the elections.
• South Africa's S&P Global PMI improved at the margin to 49.2 in January, despite staying in contractionary territory. Accompanying commentary noted that "companies registered the sharpest decline in new orders in exactly a year" but "a slowing of input cost inflation meant that output prices rose only modestly" which "has given firms greater optimism that 2024 will deliver a better year for the private sector".
• SAGB yields crept higher across the curve alongside South African FRA contracts. The aggregate BBG Commodity Index sits just a tad lower on the day but the precious metals subindex has shed 0.8% this morning.