The state of the rand

Source: Reuters. President Cyril Ramaphosa delivering his Sona address in parliament.

In general, analysts appear to be skeptical of the government's plans, with concerns once again being raised about corruption and the cost, with government debt already at uncomfortable levels.

The rand is slightly weaker at R17,80 this morning, having closed at R17,75 last night. The rand's current weakness has more to do with the firmer dollar and softer EM markets than as a result of Sona for now.

The dollar remains on the front foot after a jump in US bond yields overnight. The yield curve inversion between the two-year and 10-year yields is now at its widest since the 1980s. The two-year yield is currently at 4.50%, while the 10-year yield is at 3.67%.

The dollar is trading firmer against the euro and pound at 1.0725 and 1.2100, respectively. The higher yields and recession concerns are weighing on risk sentiment and the equity markets.