MNI China Daily Summary: Wednesday, July 31

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MNI: PBOC Net Injects CNY185.57 Bln via OMO Wednesday

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USD/ZAR Bounces Back Above 15.00 as Eskom Risks Weigh on the Outlook

SOUTH AFRICA
  • USD/ZAR trades +0.59% higher this morning, tracking weaker global risk sentiment following higher Chinese CPI & PPI data that weighed on Asian markets.
  • The cross found support at 14.8637 yesterday, to close +0.75% higher and back above the 15.00 handle to retrace 38.2% of the recent move lower.
  • Eskom woes continue to weigh on ZAR assets with unions calling for CEO De Ruyter's dismissal doing little to help the ongoing energy crisis.
  • Load-shedding is set to be reduced today, but markets are extremely concerned about the depleted level of reserves and the grid's continued vulnerability.
  • Before we turn to the MTBPS tomorrow, markets must negotiate US CPI today -expected to tick up to 0.6% m/m & 5.9% y/y with concerns of an upside print yielding a hawkish market reaction.
  • ZAR should be among those most affected by shifting risk conditions, due to its high-beta nature and may see some intraday volatility.
  • USD/ZAR remains in an in-between phase with key near-term breakout levels at 15.212 & 14.8615.
  • Intraday Sup1: 14.9847, Sup2: 14.8615, Res1: 15.2120, Res2: 15.3281
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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