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US-China Tensions Risk Upending ZAR's Run Of Form

SOUTH AFRICA
  • Local yields seeing upside pressure across the curve (+2.4-4.5bp) as bear steepening continues. Losses concentrated in 10Y, 15Y & 30Y tenors.
  • A move through 9.00 on the 10Y opens up a more meaningful move higher towards 9.20 resistance.
  • USD/ZAR tracks local yields higher +0.28% at the open in line with a weaker APAC session and weaker CNY fixing at 6.58.
  • Price action is adding pressure to 15.30 resistance following a brief push through the level on Friday.
  • 1Y basis swaps seen receding slightly from the swing high at 104, now trading at 94.00.
  • Focus this week will be on PMI data (Tue) for signs of growth follow through into Q4, with economists broadly expecting an upside print, albeit at a slower pace than October.
  • Budding US-China tensions also remain an upside risk for USD/ZAR this week. Topside resistance comes in at 15.50-15.60.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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