ZAR: Rand Regains Poise After Tuesday's Drop

The 50-EMA gave way and USD/ZAR surged to the highest point in almost eight weeks yesterday as risk-off flows took their toll on the rand. The pair has pulled back today and last deals at 17.4564, around 550 pips lower on the day, with bears looking for a continued sell-off through Oct 9 low of 17.0683 and toward the 17.0 mark. Bulls keep an eye on 17.8190, the high print of Sep 4.

• Contagion from concerns over stretched tech stock valuations underpinned the latest bout of risk aversion but the markets have stabilised somewhat into the European morning, with investors on the lookout for fresh cues. The confirmation that China was looking to remove retaliatory tariffs on a range of US agricultural products has aided sentiment.
• South Africa's S&P Global PMI slipped into contractionary territory and printed at 48.8 in October after a September outturn of 50.2. S&P noted that a 'softer increase in prices charged also suggested that inflation rates are likely to be subdued in the coming months barring any notable movements in exchange rates.'
• SAGB yields have dropped across the curve. South Africa's 5-year breakeven inflation rate sits at 3.54%, with the 10-year rate last seen at 4.11% at typing.
• Bloomberg Commodity Index has added 0.1%, with the precious metals subindex rising by 0.8%. Gold trades ~$49.6/oz. above neutral levels.