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Johannesburg - South African bonds were firmer in midday trade on Wednesday after February's CPI print came out in line with market expectations.
All eyes will now be on the rates decision due on Thursday.
By 11:50, the benchmark R157 bond was trading at 7.785% from its previous close of 7.830%, while the R207 was trading at 8.670% from its previous close of 8.710%. The R186 was trading at 8.880 from its previous close of 8.930%.
The rand was bid at 6.9153 to the dollar from its previous close of 6.9029.
Statistics SA said on Wednesday that the increase in SA's consumer price index (CPI), which is used by the South African Reserve Bank (Sarb) for its inflation target, was 3.7% year on year (y/y) in February, unchanged from January. CPI was 0.7% month on month (m/m) from 0.4% in January.
CPI was expected at 3.7% y/y, according to a survey of leading economists by I-Net Bridge, with forecasts among the 12 economists ranging from 3.4% to 3.9%.
Earlier in the day, a trader said the majority of players believed that rates would remain unchanged at the Monetary Policy Committee (MPC) meeting on Thursday.
"What is important is the rhetoric that comes out of the meeting. We expect the inflation forecast to be increased, although we don't expect the increase to exceed the upper target band. And we don't expect any upward revisions in growth," he said.
Meanwhile, Standard Bank said in a report that SA's rates were mostly suspended around the middle of their respective ranges of the past month.
"It's clear that the market is waiting on the MPC for the next impetus; although surprisingly good balance of payments data for the fourth quarter of 2010 did help push rates lower yesterday. A relatively contained day is expected into the run-up to tomorrow's MPC announcement," it said.
The National Treasury announced that it would auction 800 million rand worth of R204 bonds and R1.3bn worth of R208 bonds on March 29, at its weekly auction.
Foreigners were net buyers of R1.778bn of South African bonds including repo transactions on Tuesday after net sales of R886.320m of local bonds on Friday, Bond Exchange of South Africa statistics show. Local markets were closed Monday for a public holiday.
Nominal cumulative volume was R185.104bn on Tuesday from R63.560bn on Friday.
Foreigners were net buyers of R1.734bn of South African bonds excluding repo transactions on Tuesday after net sales of R645.666m of local bonds on Friday.
For the year to date, foreigners have been net sellers of R14.082bn 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 R16.448bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
All eyes will now be on the rates decision due on Thursday.
By 11:50, the benchmark R157 bond was trading at 7.785% from its previous close of 7.830%, while the R207 was trading at 8.670% from its previous close of 8.710%. The R186 was trading at 8.880 from its previous close of 8.930%.
The rand was bid at 6.9153 to the dollar from its previous close of 6.9029.
Statistics SA said on Wednesday that the increase in SA's consumer price index (CPI), which is used by the South African Reserve Bank (Sarb) for its inflation target, was 3.7% year on year (y/y) in February, unchanged from January. CPI was 0.7% month on month (m/m) from 0.4% in January.
CPI was expected at 3.7% y/y, according to a survey of leading economists by I-Net Bridge, with forecasts among the 12 economists ranging from 3.4% to 3.9%.
Earlier in the day, a trader said the majority of players believed that rates would remain unchanged at the Monetary Policy Committee (MPC) meeting on Thursday.
"What is important is the rhetoric that comes out of the meeting. We expect the inflation forecast to be increased, although we don't expect the increase to exceed the upper target band. And we don't expect any upward revisions in growth," he said.
Meanwhile, Standard Bank said in a report that SA's rates were mostly suspended around the middle of their respective ranges of the past month.
"It's clear that the market is waiting on the MPC for the next impetus; although surprisingly good balance of payments data for the fourth quarter of 2010 did help push rates lower yesterday. A relatively contained day is expected into the run-up to tomorrow's MPC announcement," it said.
The National Treasury announced that it would auction 800 million rand worth of R204 bonds and R1.3bn worth of R208 bonds on March 29, at its weekly auction.
Foreigners were net buyers of R1.778bn of South African bonds including repo transactions on Tuesday after net sales of R886.320m of local bonds on Friday, Bond Exchange of South Africa statistics show. Local markets were closed Monday for a public holiday.
Nominal cumulative volume was R185.104bn on Tuesday from R63.560bn on Friday.
Foreigners were net buyers of R1.734bn of South African bonds excluding repo transactions on Tuesday after net sales of R645.666m of local bonds on Friday.
For the year to date, foreigners have been net sellers of R14.082bn 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 R16.448bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
