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Johannesburg - South African bonds were up to six basis points firmer in late trade on Wednesday, having received a fillip from a strong rand.
By 15:40, the benchmark R157 bond was bid at 7.325% and offered at 7.320% from 7.385% at its previous close. The R207 was bid at 8.235% and offered at 8.215% from 8.285%, and the R186 was bid at 8.470% and offered at 8.455% from 8.525%.
The rand was bid at 6.6312 against the dollar from its previous close of 6.6754.
"Having hardly moved on the strong rand yesterday, bonds seem finally to be responding to the local currency's strength today," a local bond trader said, adding that there appeared to be some hesitancy in the market earlier to stake positions.
The National Treasury announced on Wednesday morning that it will auction R1.3bn worth of R203 bonds and R800m worth of R213 bonds on August 2.
With no local data due today, players are eyeing international events for direction.
The next major local data release of interest to the bond market is the producer price index (PPI) - due tomorrow. SA's PPI is expected to have increased at 6.8% year on year (y/y) in June from the 6.9% y/y seen in May, a survey by I-Net Bridge has found. Forecasts among seven leading economists surveyed ranged from 6.0% y/y to 7.0% y/y.
Standard Bank noted that key today would be US durable goods orders and the latest US Federal Reserve beige book survey.
"Durable goods orders, a forward indication of investment intentions, are expected to have risen by 0.3% month on month seasonally adjusted (m/m sa) in June, from a revised 2.1% m/m sa jump in May (revised from an initial estimate of 1.9%). Excluding transportation, durable goods orders are seen rising by 0.5% m/m sa from a revised 0.7% m/m sa in May.
"Amid fears of a loss of momentum in the US economy, the latest Fed beige book economic survey will be released. The survey provides a composite of data on the health of the US economy. The Fed revised its expectations of 2011 US growth lower at its last meeting (June 21-22), to an upper limit of 2.9%, from an upper limit of 3.3% at the April meeting," they noted.
Foreigners were net sellers of R1.624bn of South African bonds including repo transactions on Tuesday, after net purchases of R667.568m of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R181.586bn on Tuesday from R54.563bn on Monday.
Foreigners were net sellers of R1.628bn of South African bonds excluding repo transactions on Tuesday after nets purchases of R668.928m of local bonds on Monday.
For the year to date, foreigners have been net buyers of R40.735bn 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 buyers of R31.830bn of local bonds. In 2010 they bought net r44.541bn worth of bonds.
By 15:40, the benchmark R157 bond was bid at 7.325% and offered at 7.320% from 7.385% at its previous close. The R207 was bid at 8.235% and offered at 8.215% from 8.285%, and the R186 was bid at 8.470% and offered at 8.455% from 8.525%.
The rand was bid at 6.6312 against the dollar from its previous close of 6.6754.
"Having hardly moved on the strong rand yesterday, bonds seem finally to be responding to the local currency's strength today," a local bond trader said, adding that there appeared to be some hesitancy in the market earlier to stake positions.
The National Treasury announced on Wednesday morning that it will auction R1.3bn worth of R203 bonds and R800m worth of R213 bonds on August 2.
With no local data due today, players are eyeing international events for direction.
The next major local data release of interest to the bond market is the producer price index (PPI) - due tomorrow. SA's PPI is expected to have increased at 6.8% year on year (y/y) in June from the 6.9% y/y seen in May, a survey by I-Net Bridge has found. Forecasts among seven leading economists surveyed ranged from 6.0% y/y to 7.0% y/y.
Standard Bank noted that key today would be US durable goods orders and the latest US Federal Reserve beige book survey.
"Durable goods orders, a forward indication of investment intentions, are expected to have risen by 0.3% month on month seasonally adjusted (m/m sa) in June, from a revised 2.1% m/m sa jump in May (revised from an initial estimate of 1.9%). Excluding transportation, durable goods orders are seen rising by 0.5% m/m sa from a revised 0.7% m/m sa in May.
"Amid fears of a loss of momentum in the US economy, the latest Fed beige book economic survey will be released. The survey provides a composite of data on the health of the US economy. The Fed revised its expectations of 2011 US growth lower at its last meeting (June 21-22), to an upper limit of 2.9%, from an upper limit of 3.3% at the April meeting," they noted.
Foreigners were net sellers of R1.624bn of South African bonds including repo transactions on Tuesday, after net purchases of R667.568m of local bonds on Monday, data released by the JSE shows.
Nominal cumulative volume was R181.586bn on Tuesday from R54.563bn on Monday.
Foreigners were net sellers of R1.628bn of South African bonds excluding repo transactions on Tuesday after nets purchases of R668.928m of local bonds on Monday.
For the year to date, foreigners have been net buyers of R40.735bn 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 buyers of R31.830bn of local bonds. In 2010 they bought net r44.541bn worth of bonds.
