Johannesburg - South African bonds were firmer in early trade on Tuesday, on the back of credit extension to the private sector (PSCE) and M3 money supply data out this morning.
Credit extension to the private sector (PSCE) grew at a rate of 1.98% year-on-year (y/y) in July from a revised 0.89% (0.92%) y/y in June, the South African Reserve Bank (Sarb) said on Tuesday.
The rate of growth of South Africa's broad M3 money supply measure rose by 3.71% in the year to end July from 2.40% (2.41%) in the year to end June.
The rate of growth in South African credit extension to the private sector (PSCE) was expected at 1.5% y/y, while M3 money supply aggregate growth was expected at 2.5% y/y.
Forecasts among the seven leading economists surveyed for PSCE ranged from 1.2% to 1.9%, while the range of forecasts for M3 was from 1.9% to 2.8% at the top of the range.
South Africa's total domestic credit extension grew at a rate of 1.33% in July from a revised 0.66% (1.14%) in June.
By 08:50 the benchmark R157 bond was bid at 7.200 from 7.225% at its close on Monday. The benchmark R207 was bid at 7.925% from 7.920%, while the R186 was bid at 7.990% from 8.025%.
The rand was bid at 7.3660 to the dollar from 7.3340 at its previous close.
"Bonds firmed slightly on the data out this morning, the longer-end more so. All eyes are on the auction later this morning," said a local trader.
The National Treasury will auction R1.1bn worth of R208 bonds and R1.0bn worth of R214 bonds at its regular weekly auction this morning.
Tuesday also sees the release of July trade data by Sars.
The trade account is expected to have moved back into a deficit after June's unexpected R5.6bn surplus.
"We expect the trade surplus to reverse into deficit territory in July, with a deficit of R1.4bn pencilled in," said Standard Bank.
Foreigners were net sellers of R16.566m of South African bonds including repo transactions on Monday after net sales of R63.605m of local bonds on Friday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R10.985bn on Monday from R15.664bn on Friday.
Foreigners were net sellers of R122.929m of South African bonds excluding repo transactions on Monday after net sales of R48.685m of local bonds on Friday.
In the year to date foreigners have been net buyers of R66.744bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R60.147bn worth of bonds.
In 2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds.