ZAR: USDZAR Extending Recovery, Narrows Gap to Weekly High
Feb-13 14:14
USDZAR is re-approaching yesterday’s highs at typing, extending the recovery from this morning’s lows following headlines from Trump on reciprocal tariffs and comments from President Ramaphosa, who said again that South Africa will “not be bullied” – likely in response to the US suspending aid to South Africa.
- Weakness across the commodities space may also be exacerbating the rand’s losses, with the currency among the weakest across the EMEA space. Despite this week’s ~0.9% advance compared to Friday's close, key short-term resistance for USDZAR is not seen until 19.2296, the Jan 13 high. More immediate focus will be on Monday’s high of 18.6543.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSY OPTIONS: Large Mar'25 10Y Call Buy
Jan-14 14:12
- +50,000 TYH5 108.5 calls, 27 vs. 107-08.5/0.31%, total volume just over 57,000 - exceeding open interest of 31,317 coming into the session
GILTS: Still Under Pressure
Jan-14 14:09
Gilts edge away from recent session lows, although markets seem keen to continue to fade rallies at this stage, with Chancellor Reeves offering little new in the Commons today.
- Reeves conceded that the UK is facing “economic headwinds”, while stressing the need to go further to kickstart growth and pledging to meet the fiscal rules at all times. A reminder that her future in the role is in doubt
- Futures as low as 89.15, last 89.23.
- Bearish technicals intact, initial support at cycle lows of 88.96.
- Yields little changed to 2bp higher, curve bear steepens.
- 10s & 30s within 3.5bp of cycle highs, located at 4.921% & 5.473%, respectively.
- Tomorrow’s 10-Year gilt supply is eyed, although today’s 30-Year I/L supply saw decent enough demand.
- CPI and comments from BoE dovish dissenter Taylor also due Wednesday.
FOREX: EURGBP Rally Extends, Focus Turns to UK CPI Release
Jan-14 14:06
- Sterling weakness continuing to stand out in G10 currency markets, as EURGBP extends session gains to 0.5%, registering a fresh two-month high in recent trade ~0.8443, helped by the quick fade of GBPUSD strength following the soft US data release.
- Price action for EURGBP narrows the gap to the next target of 0.8448, the Oct 31 high and a reversal trigger from a technical perspective. Further upside would signal scope for a move towards 0.8494, the August 26 high.
- The next key input for the Pound will be UK CPI, released tomorrow at 07:00 GMT, with focus on the services Y/Y figure for which consensus stands at a slightly softer 4.8% (vs 5.0% November). Our full preview for the release will be published shortly.
