ZAR: Rand Trades On Cautious Note, Awaits Cabinet Announcement

Spot USD/ZAR continues to tick higher as South African officials stay mum on the new cabinet with talks still ongoing. The rate last deals at 18.2810, up 330 pips on the session, with bulls looking for a move through the 50-EMA at 18.4782 and towards the round figure/Jun 6 high of 19.0000/54. Meanwhile, bears see Jun 21 low of 17.8689 as their initial target.

• President Ramaphosa is yet to unveil the line-up of his new cabinet, with the Democratic Alliance (DA) playing hardball in negotiations on the number of portfolios it should get as part of the government of national unity (GNU) pact. Meanwhile, News24 reported that the African National Congress (ANC) is keeping the channels of communication open with the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe (MK) Party. This was later confirmed by ANC's Ronald Lamola, who also said that if the agreement with the DA falls through, then "we are prepared as the ANC to be in opposition benches."
• SAGB yields are slightly higher across the curve, taking their cue from US Tsys. South Africa's 5-year and 10-year breakeven inflation rates have edged higher to 5.09% and 6.09% respectively.
• The composite BBG Commodity Index sits marginally higher on the session, as does the precious metals subindex.