ZAR: Rand Trades Flat As Cabinet Negotiations Drag On

USD/ZAR swung higher at the start to the week as participants were waiting for the outcome of the tug-of-war between the ANC and DA over the distribution of seats in the new cabinet and the allocation of strategic portfolios. Buying pressure has now dissipated and the pair has traded sideways early doors Tuesday, as the wait for the announcement of a new cabinet continues.

• When this is being typed, USD/ZAR deals at 18.1071 and bulls look for a rally towards the 50-EMA at 18.4808 and the round figure/Jun 6 high of 19.000054. Conversely, the focus on the downside is on Jun 21 low of 17.8689.
• SAGB yields are lower across the curve, despite upticks in US Tsy yields. South Africa's 5-year and 10-year breakeven inflation rates have slipped to 5.02% and 6.04% respectively.
• The composite BBG Commodity Index has shed 0.3%; the precious metals subindex also sits 0.3% lower. Gold is ~$9.3/oz. worse off on the session.