ZAR: Rand Regains Poise Even As S. Africa's PMI Slips Below 50

USD/ZAR has ticked lower this morning but the short-term uptrend remains intact for now. Political headlines continue to steal the limelight, with ANC-DA talks in Gauteng ongoing, but the national cabinet will be finally sworn in today. The rate deals at 18.5032, just over 1,000 pips below neutral levels, with bears looking for a dip towards 17.8689, the low print of Jun 21. Conversely, bulls look for gains towards the round figure/Jun 6 high of 19.0000/54.

• South Africa's economy entered contraction in June, according to the latest S&P Global PMI survey, with headline index deteriorating to 49.2 from 50.4. On the bright side, "the PMI averaged 50.0 in the second quarter, which was the strongest reading since the final quarter of 2022." In addition, S&P noted that "there could be further relief seen in official inflation statistics in the near term, which will be another boon for economic conditions."
• The aggregate BBG Commodity Index has added 0.7% so far and the precious metals subindex is up 1.4%, while gold trades ~$16.4/oz. better off.
• SAGB yields are slightly lower across the curve, with 10-year breakeven inflation rate last seen at 6.12%. Note that South Africa will sell 2030 floating bonds today.
• SARB Governor Lesetja Kganyago will speak at the ECB forum later in the day.