Morning Wrap

• The ZAR  traded above key level of R19.15/$ for a few moments, after banks hit easy buy stops above the level.
• The unit recovering to open at R19.06/$ in early trading, but very much on the back foot vs the majors.
   
• Concerns remain in financial markets with China’s property sector making headlines.
  • The PBoC cutting rates by 15bps to support the economy.
  • In addition;
    • The inflation problem continues, US treasury issuances (basically a form of QT) and rising US yields.
    • The US10YT at 4.20% supporting the dollar at the expense of high yielders like the ZAR and also Gold.  
       
• Technically, we’ve tested R19.1500/$ via a stop hunt, but a re-test opens up higher levels for USDZAR.
   
• We except the ZAR to remain on the back-foot in the current environment.
   
• Trade :  BUY USDZAR

Markets this morning:

• USDZAR 19.0700
• DOLLAR 103.06
• EURUSD 1.0915
• SP500 4,501
• GOLD 1905
• US10YT 4.20%