Local government bonds were weaker on Monday at midday in subdued trade‚ as the market awaited Friday’s US non-farm payroll data for clues about the country’s interest-rate trajectory in 2018.
A better than expected number could support the dollar‚ with the greenback losing ground following president Donald Trump’s decision to increase tariffs on steel and aluminium‚ sparking fears of a global trade war.
“South African government bonds continue to trade very weak‚ as locals retreat to the sidelines and fast money chases bids‚ which are few and far between‚” analysts at Nedbank Corporate and Investment Banking (CIB) said.
At 11.30am the R186 was bid at 8.23% from 8.17% and the R207 was at 6.81% from 6.74%.
The rand was at R11.9552 to the dollar from R11.9387‚ after earlier weakening to R12.0273.
Global risk remains in the spotlight after exit polls from Italian elections held on Sunday pointed to clear leads by anti-EU parties. The possibility of further political instability in Europe’s third-largest economy was unsettling markets‚ and also cast doubts on the outlook for the eurozone economy‚ analysts said.
The US 10-year treasury was last seen at 2.8442% from 2.8615%.
Source: TMG Digital.