Spillover From Asia Weighs On Rand, Little In Way Of Reassuring News At Home

The spill-over of broader risk aversion from the Asia session has applied pressure to the rand, with USD/ZAR flirting with the 19.0 figure as a result. From a technical viewpoint, a move through Mar 19 high of 19.0313 would bring Feb 23 high of 19.3899 into play. Bears look for a pullback towards Mar 13 low of 18.5066.

• Little in the way of positives in domestic news flow, as Eskom briefly resumed loadshedding overnight, while National Assembly Speaker Mapisa-Nqakula stepped aside after her home was raided by the police. Her latest troubles may amplify political headwinds for the ruling ANC party ahead of the upcoming elections.
• USD/CNH breached the closely watched 7.2 level overnight after a relatively weak PBOC fixing, which many interpret as a signal of a more permissive approach towards redback depreciation. The move sent shock waves across the wider FX space, boosting safe haven currencies.
• The aggregate BBG Commodity Index has fallen 0.5% today, with precious metals last seen 0.8% worse off (albeit they remain in a sideways trend near recent cyclical highs).
• SAGB yields are slightly higher, with the 10-year breakeven inflation rate sitting at 6.80%.