Johannesburg - The South African bond market was firmer in midday trade on Wednesday after the release of the new consumer price index (CPI) at 10:00 showed a 5.4% year-on-year (y/y) increase compared with the consensus forecast of a steady inflation rate at 5.7% y/y.
Forecasts among the 11 economists ranged from 5.4% to 5.9%.
The January CPI has been calculated using new weights in the CPI basket. Statistics SA announced the reweighting last year in accordance with the regular updating of the basket to reflect items attracting the most spending in SA.
The new trimmed mean measure eased to 4.5% y/y in January from 4.6% y/y in December.
“The CPI came in better than expected‚ so bonds have continued to firm‚“ a local bond trader said.
At 11:40 the benchmark R186 was trading at 7.190% from 7.260% at Tuesday’s close. The R157 was trading at 5.290% from 5.315% at its previous close‚ and the R207 was bid at 6.260% and offered at 6.240% from its previous close of 6.280%.
The rand was last bid at R8.8401/$ from R8.8521 at Tuesday’s close.
Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.