ZAR: Rand On Back Foot Ahead Of Wednesday's CPI Data

Spot USD/ZAR has advanced to last trade at 18.3735, around 1,150 pips higher on the session. The rand awaits fresh catalysts, including local CPI data tomorrow. Technically, bulls look for gains past Jul 2 high of 18.6627, while bears see Jun 21 low of 17.8689 as their initial target.

• Locally, the focus this week falls on June CPI data, due for release tomorrow morning. Consensus looks for a downtick in headline inflation to +5.1% Y/Y from +5.2% prior, with core inflation seen unchanged from the previous month at +4.6% Y/Y. Reminder that the SARB aims to anchor both at the +4.5% Y/Y mid-point of the target range.
• From a cross-asset perspective, SAGB yields sit a tad higher, with 10-year breakeven inflation rate last seen at 5.83%. The BBG Commodity Index slipped 0.1%, while the precious metals subindex barely changed on the day.
• Eskom Chair Mteto Nyati said that the reliability of the utility's fleet has improved, with the level of unplanned outages halved relative to 2023.
• The South African Reserve Bank reported that the leading indicator fell to 111.9 in May from 113.0 prior.