South African bonds were a couple of basis points softer just before midday, as players marked time ahead of the key local rates decision at around 15:00.
By 11:52 the short-term government R153 bond was at 9.190% from its previous close of 9.180%. The medium-term R157 was at 8.830% from 8.785% at Wednesday’s close and the long-term R186 was at 8.520% from 8.470% before.
The rand was last at 9.0250 per dollar from a previous 9.1746, but well off its intraday worst level seen on Wednesday of 9.4595 per dollar - its weakest in six years.
"The rand has come back nicely and we’ve pretty much been following that. We are just waiting for the MPC. We’ve not seen much action in the past hour or two, players are just sitting on their hands," commented a local bond trader.
The Reserve Bank’s Monetary Policy Committee meeting got under way yesterday, with the decision on interest rates expected at around 15:00.
The consensus is for South Africa’s repo rate to remain unchanged at 12% in October and for the first rate cut to take place in April next year, according to a survey of leading economists by I-Net Bridge.
However, some talk has surfaced that coordinated rate-cutting around the world may include South Africa.
One analyst spoken to by I-Net Bridge who thinks a cut will be a good idea and who actually predicted this may happen ahead of the news of coordinated cutting - said this was not to try and boost growth, but would rather be an attempt to protect the entire global financial system.
Foreigners were net sellers of 4.207 billion rand worth of South African bonds on Wednesday after net purchases of 444.457 million rand worth of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was 64.677 billion rand on Wednesday from 171.615 billion rand on Tuesday. |
