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ZAR at the Mercy of Bond Flows, $ factors and Rising Covid Cases

SOUTH AFRICA
  • Local rates bull flattening at the open on tentative risk-on sentiment.
  • 30Y -3.3bp after trading mostly flat yesterday while the front end lifted +5.5bp towards the back end of the session.
  • T40 index trading at new all-time highs, commodities +0.3%.
  • USD/ZAR opens -0.36%, marginally ahead of EM peers to hold around the 15.00 handle - showing little reaction to China's opposition to US-Taiwan/HK relations and the Fed minutes overnight.
  • USD/CNY seemingly paused above 6.45 should temper ZAR strength.
  • Price action should track USD side developments & broad local bond flows, but be on alert for announcements from Ramaphosa tomorrow.
  • Although no new measures are expected things may still get choppy on mixed expectations.
  • Support coming in at 14.9786 - 14.8940 zone, RES1: 15.0998, RES2: 15.2134
  • Electricity production/consumption data due 1100GMT - may give clues as the the demand/supply side pressures fuelling Load-shedding risks.
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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