ZAR: Rand Weakens To Three-Year Lows, SARB Speak Under Microscope
May-10 09:06
USD/ZAR broke above crucial resistance from Mar 8 high of ZAR18.7192 this morning, building on yesterday's 1.7% upswing as the South African rand remains the worst performing EMEA currency. The pairs latest upleg comes despite fairly limited gains for the BBDXY index, with South Africa's ongoing energy crisis sapping strength from the local currency.
- Spot USD/ZAR last trades at ZAR18.8147, up ~1,810 pips on the day, after printing new three-year highs at ZAR18.8368. With the ZAR19.00 figure in sight, a move through that level would expose Apr 6, 2020 high of ZAR19.3508. Bears see the 50-EMA at ZAR18.2135 as their initial target.
- Local-currency bonds have now trimmed their morning losses but continue to trade on the back foot after a dismal performance yesterday, with yields refreshing five-month highs this morning. South Africa's breakeven inflation rate surged to 6.88% before easing to 6.81% where it sits at typing.
- The commodity complex is weaker, with the BBG Commodity Index trading ~0.7% lower and the precious metals subindex last seen ~0.4% worse off.
- Comments from local central bankers will be closely watched today. In the absence of domestic data releases, the focus on that front turns to the U.S. CPI report.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Early Richening Holds In Asia
Apr-10 04:32
TYM3 deals at 115-27, +0-01+, with a narrow 0-04+ range observed on volume of ~49k.
- Cash tsys sit ~3bps richer across the major benchmarks.
- Asia-Pac participants faded Friday's post-NFP cheapening, perhaps focusing on the lower than expected average hourly earnings.
- The latest Sino-Taiwan tensions, as China simulated precision strikes on Taiwan during military drills over the weekend, also added a layer of support.
- The early richening held for the remainder of the session as tsys traded in narrow ranges with little follow through on moves.
- Fed dated OIS price ~18bp hike into the May meeting with the terminal rate at 5%. There are now ~70bps of cuts in 2023.
- There is a thin data calendar in Europe today, further out US Wholesale Inventories and Fedspeak from NY Fed President Williams provide the highlight on Monday.
NZD: Marginally Pressured In Light Holiday Trade
Apr-10 02:11
NZD/USD prints at $0.6240/45, ~0.1% softer today.
- The pair has fallen below its 20-Day EMA in light holiday volumes, a narrow 20 pip range has been observed thus far.
- AUD/NZD is little changed, the cross has held below the $1.07 handle after breaking below last week.
- The domestic markets remain closed for the remainder of the session. Wider swings in risk sentiment will be the main driver in NZD.
AUD: A$ Lower In Light Trade But Range Trading
Apr-10 01:45
The AUDUSD is down 0.2% to 0.6660 in light trading. It reached a low of 0.6656 before a high of 0.6682. The USD index is up slightly in APAC trading so far.
- In terms of the major crosses, Aussie is up 0.2% against the yen to 88.31 and +0.1% versus the kiwi to 1.068. AUDEUR is down 0.1% to 0.6111 and AUDGBP flat at 0.5365.
- Australia, NZ and HK are closed today but the Nikkei is up 0.4%, the KOSPI +1% and the CSI +0.2% higher. WTI is trading sideways and is around $80.70/bbl. Copper prices are down 0.1% and iron ore is just below $118/t.
- On Tuesday, Westpac’s April consumer confidence data and the March NAB business survey are released. They’re both likely to be watched closely given the RBA’s increased data dependence.
