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The PPI for final manufactured goods‚ considered the headline PPI‚ was expected to have increased to 5.2% year on year (y/y) in May from 5.4% y/y in April‚ a survey by I-Net Bridge found.
The actual figure of a 4.9% y/y increase in May was outside the forecast range of 5.1% y/y to 5.6% y/y.
“The lower than expected consumer and producer inflation data is muddying the water in terms of monetary policy‚ which impacts our market.
"In early April we were expecting a rate cut‚ then we had the emerging market currency blow-out‚ which so far has seen little flow-through into prices except for the retail petrol price‚ which will rise by more than 80c per litre next week‚” a local bond trader said.
At 11:51 the benchmark R186 bond was trading at 8.030% after closing at 8.130% on Wednesday and 8.200% on Tuesday. The R157 was trading at 6.185% from 6.310% previously and the R207 was bid at 7.445% and offered at 7.415% from 7.575% at its previous close.
The rand was bid at R10.0386/$ from R10.0911 at Wednesday’s close and R10.1002 at Tuesday’s close.
One of the reasons for the lower than expected PPI in May was a 4.4% monthly decrease in the rand price of imported crude oil. This pulled the y/y increase down to 1.2% in May from 8.4% in April.
