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Johannesburg - South African bonds were firmer on Thursday morning on the back of a stronger local currency.
By 08:50, the benchmark R157 bond was trading at 7.810% from its previous close of 7.840%, while the R207 was bid at 8.680% from its previous close of 8.690%. The R186 was trading at 8.980% from its previous close of 9.000%.
The rand was bid at R6.7776 to the dollar from its previous close of R6.8032.
"We're firmer on the strong rand. PPI is the big number of the day," a local trader said.
SA's producer price index (PPI) is expected to have increased at 5.9% year on year (y/y) in February from the 5.5% y/y seen in January, a survey by I-Net Bridge has found.
Forecasts among nine leading economists surveyed ranged from 5.6% y/y to 6.2% y/y.
Standard Bank said in a morning report that "hawkish" comments from the South African Reserve Bank (Sarb) governor Gill Marcus spooked markets on Wednesday.
"Short-end rates responded viciously to a perception that the Sarb governor was correcting perceptions about the central bank's inflation stance. However, a full reading of Governor Marcus' speech on Wednesday evening reveals a largely consistent message with that of the MPC statement from last week. Fiscal data revealed on Tuesday suggested a much narrower deficit for the financial year of 2010/11 for collected versus targeted tax revenues - this is comforting from an issuance perspective," the bank's analysts said.
They added that Wednesday's abrupt upward reaction in the curve was expected to rescind, although a sharper-than-expected rise in PPI this morning could delay this.
Foreigners were net sellers of R182.791m of South African bonds including repo transactions on Wednesday, after net purchases of R342.805m of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R65.609bn on Wednesday from R173.140bn on Tuesday.
Foreigners were net sellers of R346.525m of South African bonds excluding repo transactions on Wednesday, after net purchases of R338.726m of local bonds on Tuesday.
For the year to date, foreigners have been net sellers of R9.530bn worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net sellers of R11.695bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
By 08:50, the benchmark R157 bond was trading at 7.810% from its previous close of 7.840%, while the R207 was bid at 8.680% from its previous close of 8.690%. The R186 was trading at 8.980% from its previous close of 9.000%.
The rand was bid at R6.7776 to the dollar from its previous close of R6.8032.
"We're firmer on the strong rand. PPI is the big number of the day," a local trader said.
SA's producer price index (PPI) is expected to have increased at 5.9% year on year (y/y) in February from the 5.5% y/y seen in January, a survey by I-Net Bridge has found.
Forecasts among nine leading economists surveyed ranged from 5.6% y/y to 6.2% y/y.
Standard Bank said in a morning report that "hawkish" comments from the South African Reserve Bank (Sarb) governor Gill Marcus spooked markets on Wednesday.
"Short-end rates responded viciously to a perception that the Sarb governor was correcting perceptions about the central bank's inflation stance. However, a full reading of Governor Marcus' speech on Wednesday evening reveals a largely consistent message with that of the MPC statement from last week. Fiscal data revealed on Tuesday suggested a much narrower deficit for the financial year of 2010/11 for collected versus targeted tax revenues - this is comforting from an issuance perspective," the bank's analysts said.
They added that Wednesday's abrupt upward reaction in the curve was expected to rescind, although a sharper-than-expected rise in PPI this morning could delay this.
Foreigners were net sellers of R182.791m of South African bonds including repo transactions on Wednesday, after net purchases of R342.805m of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R65.609bn on Wednesday from R173.140bn on Tuesday.
Foreigners were net sellers of R346.525m of South African bonds excluding repo transactions on Wednesday, after net purchases of R338.726m of local bonds on Tuesday.
For the year to date, foreigners have been net sellers of R9.530bn worth of local bonds, excluding repo transactions. In 2010 foreigners bought net R57.064bn worth of local bonds, excluding repo transactions.
For the year to date for total transactions, including repo transactions, foreigners have been net sellers of R11.695bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
