SOUTH AFRICA: SARB Stands Pat On Rates, S. Africa Observes Public Holiday
- The South African Reserve Bank (SARB) kept the repo rate unchanged at 7.50%, as expected by most economists, with Governor Lesetja Kganyago pointing to elevated risks "extreme levels of uncertainty". The decision was supported by a majority of four members, while two voted for a 25bp cut. The inflation forecast was nudged lower to +3.6% Y/Y this year (versus +3.9% in January) and to +4.5% Y/Y in 2025 (versus +4.6% in January). Core inflation projection was lowered by 0.1pp for this year but revised slightly higher for 2026 and 2027. Policymakers said that confidence in the latest forecast was not high, given the elevated level of uncertainty.
- The Democratic Alliance (DA) called for a review of foreign policies and the appointment of ambassadors at cabinet level (it is now a presidential prerogative), arguing that the African National Congress (ANC) should consult with its coalition partners. This comes amid continued tensions with the US. Presidency spokesperson Vincent Magwenya dismissed the suggestion, but it indicates that the DA may be seeking more areas where it could push for collective decision making at the expense of the ANC's discretion. The party confirmed that reiterating that "the ANC (...) no longer enjoy an outright majority and are no longer at liberty to single-handedly determine South Africa's foreign policy agenda".
- South Africa observes a national holiday (Human Rights Day), with local markets shut as a result.
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Historical bullets
RIKSBANK: (H5) Corrective Cycle Extends
- RES 4: 107.045 High Feb 3 and a reversal trigger
- RES 3: 106.975 High Feb 10
- RES 2: 106.855 High Feb 12 and a key near-term resistance
- RES 1: 106.789 20-day EMA
- PRICE: 106.710 @ 07:22 GMT Feb 19
- SUP 1: 106.668 61.8% retracement of the Jan 15 - Feb 3 bull leg
- SUP 2: 106.600 Low Jan 31
- SUP 3: 106.515 Low Jan 30
- SUP 4: 106.435 Low Jan 15 and key support
A bull cycle that began Jan 15 in Schatz futures remains in play, and the pullback from the early February highs appears corrective - for now. However, the contract maintains a softer short-term tone and this highlights potential for a deeper retracement. A continuation lower would open 106.600 next, the Jan 31 low. For bulls, initial firm resistance to watch is 106.855, the Feb 12 high. A break would highlight an early bullish reversal signal.
BOBL TECHS: (H5) Approaching Trendline Support
- RES 4: 118.258 61.8% retracement of the Dec 2 - Jan 14 bear leg
- RES 3: 117.980 High Feb 3 / 5 and a reversal trigger
- RES 2: 117.600 High Feb 13 and a key short-term resistance
- RES 1: 117.418 20-day EMA
- PRICE: 117.130 @ 07:21 GMT Feb 19
- SUP 1: 117.048 Trendline drawn from Jan 15 low
- SUP 2: 116.700 Low Jan 30
- SUP 3: 116.550 Low Jan 24
- SUP 4: 116.280 Low Jan 14 / 15 and key support
Bobl futures remain in a short-term corrective cycle and the contract remains close to recent lows. Price has recently traded through support at the 20-day EMA - at 117.430. The extension lower has exposed a trendline support drawn from the Jan 15 low, at 117.048. Clearance of the trendline would strengthen a bearish threat and open 116.700, the Jan 30 low. Initial firm resistance to watch is 117.600, the Feb 13 high.
BUND TECHS: (H5) Has Cleared Trendline Support
- RES 4: 134.54 61.8% retracement of the Dec 2 - Jan 14 bear leg
- RES 3: 133.71 High Feb 5 and a reversal trigger
- RES 2: 132.97 High Feb 13 and a key near-term resistance
- RES 1: 132.59 20-day EMA
- PRICE: 131.82 @ 07:20 GMT Feb 19
- SUP 1: 131.59 61.8% retracement of the Jan 14 - Feb 5 bull leg
- SUP 2: 131.00 Low Jan 24 and a key short-term support
- SUP 3: 130.28 Low Jan 15 and the bear trigger
- SUP 4: 130.11 1.236 proj of the Oct 1 - Nov 6 - Dec 2 ‘24 price swing
Bund futures are trading lower again, as the contract extends the reversal that started Feb 5. Price is through an important short-term support at 132.12, a trendline drawn from the Jan 15 low. The breach strengthens a bearish theme and signals scope for an extension towards 131.59 next, a Fibonacci retracement. Below 131.59, lies 131.00, the Jan 25 low and a key support. Initial firm resistance to watch is 132.97, the Feb 13 high.
