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ZAR: Rand Leads Gains In EMEA Space

ZAR
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The rand managed to unwind the bulk of its initial gains after the release of strong US GDP data yesterday afternoon as well as an intraday recovery of commodity prices. USD/ZAR sales resumed during the Friday session, with the pair last changing hands at 18.2617, around 900 pips below neutral levels. US data remain in focus, with PCE data coming up later today, while the South African docket is empty.

  • From a technical point of view, a sell-off past Jul 11 low of 17.9412 and Jun 21 low of 17.8689 is needed to confirm that the bearish theme is still intact. Bulls look for a rally above Jul 2 high of 18.6627, which would signal that a broader reversal may be underway.
  • SAGBs are firmer across the curve, with South Africa's 10-year breakeven inflation rate edging lower to 5.74%. The National Treasury will today hold an auction for linkers. On that note, Bloomberg ran a report noting that South African bonds have consistently beaten other EM local-currency bonds this year and are extending this streak.
  • The aggregate BBG Commodity Index is now barely changed on the day, despite starting on the front foot. The precious metals subindex has also trimmed gains and sits just 0.2% above unchanged levels. Gold last deals ~$4.3/oz. better off.
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The rand managed to unwind the bulk of its initial gains after the release of strong US GDP data yesterday afternoon as well as an intraday recovery of commodity prices. USD/ZAR sales resumed during the Friday session, with the pair last changing hands at 18.2617, around 900 pips below neutral levels. US data remain in focus, with PCE data coming up later today, while the South African docket is empty.

  • From a technical point of view, a sell-off past Jul 11 low of 17.9412 and Jun 21 low of 17.8689 is needed to confirm that the bearish theme is still intact. Bulls look for a rally above Jul 2 high of 18.6627, which would signal that a broader reversal may be underway.
  • SAGBs are firmer across the curve, with South Africa's 10-year breakeven inflation rate edging lower to 5.74%. The National Treasury will today hold an auction for linkers. On that note, Bloomberg ran a report noting that South African bonds have consistently beaten other EM local-currency bonds this year and are extending this streak.
  • The aggregate BBG Commodity Index is now barely changed on the day, despite starting on the front foot. The precious metals subindex has also trimmed gains and sits just 0.2% above unchanged levels. Gold last deals ~$4.3/oz. better off.