Monday 25 November 2024 (Time: 06h30)
MACRO
US 10-YEAR BOND YIELD (US10Y) The aggressive upward trend has stalled, reflecting that fixed income investors have started to take an interest in the front end of the curve. The prospect of robust economic growth and commentary members of the Federal Open Market Committee has been a reason for higher yields in recent weeks.
US DOLLAR INDEX (DXY) Policy outlook has placed in the driven in a high bullish momentum regime, with a path toward short term overbought levels. This has, in part, been driven by higher bond yields, which as resulted in flows to the U.S post the election outcome. Friday saw new highs of +107 in early trade (Asian Session).
U.S. DOLLAR / SOUTH AFRICAN RAND (USD/ZAR) Currency weakness has been driven by outflows from emerging markets, which has been the result of both higher U.S bond yields and a stronger U.S Dollar. The approaching overbought regime seen on 14 November was a technical catalyst for ZAR buying and the resultant unwind back to the rising 8-day EMA. Over the short term, the broad trend remains up.
SOUTH AFRICA 10-YEAR BOND YIELD (ZA10Y) Positive outlooks for the South African economy has kept a lid on local bond yields, which have decoupled from the recent weakness in the currency (ZAR). Currently heading back toward the previous breakout level (and igniting bar candle) seen on 01 October.
Lester Davids
Analyst: Unum Capital
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