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Johannesburg – South African bonds were softer in quiet morning trade on Friday after comments late on Thursday saw a sell-off in emerging-market currencies.
“The rand and bonds had strengthened in late afternoon trade on Thursday on the back of the Chinese rate cut‚ but US Federal Reserve chairman Ben Bernanke poured cold water on this market exuberance in his testimony before Congress‚” a local trader said.
At 08:30‚ the benchmark R157 bond was trading at 6.255% from Thursday’s close of 6.230%‚ Wednesday’s close of 6.260% and Tuesday’s close of 6.330%. The R207 was bid at 7.545% and offered at 7.515% from a previous close of 7.500% and the R186 was bid at 8.290% and offered at 8.260% from its close of 8.245%.
The rand was bid at R8.4187 against the dollar from Thursday’s close of R8.3966 and Thursday’s best level of R8.2154 and a worst level on Monday of R8.6291.
Emerging-market currencies gained on Thursday after China's central bank lowered its benchmark interest rates on loans and deposits‚ and moved to allow rates to float more freely‚ in a bid to support growth and advance reform of the financial system.
Standard Bank said in its morning comment the announcement that the Chinese central bank had decided to cut its benchmark interest rate by 25 basis points yesterday initially buoyed sentiment. This cut was the first since 2008.
“The euphoria proved short-lived‚ however‚ on concerns that the cut was a pre-emptive move ahead of expected investment and output growth figures tomorrow. The rally was further dampened by comments by Fed chairman Bernanke that the Fed would need to assess conditions before deciding whether to provide further monetary stimulus. These comments were widely interpreted as pouring cold water on the idea of a third bout of quantitative easing (QEIII) after several Fed officials had hinted at the possibility over the past few days.”
Dow Jones Newswires reported that the euro was lower against the dollar and yen during Asian trading on Friday as risk sentiment took a hit from the comments by Bernanke‚ who on Thursday stopped short of signalling that the Fed would take imminent action to support the US economy.
Elsewhere‚ Japan raised its first quarter GDP-growth estimate to an annualised 4.7% from the previous quarter‚ from an initial reading of 4.1%‚ largely because capital spending was revised upward.
Foreigners were net buyers of R707.57m of South African bonds including repo transactions on Thursday after net purchases of R2.962bn of local bonds on Wednesday‚ data released by the JSE show.
Nominal cumulative volume was R35.5bn on Thursday from R61.8223bn on Wednesday.
Foreigners were net buyers of R728.955m of South African bonds excluding repo transactions on Thursday net purchases of R2.951bn of local bonds on Wednesday.
For the year to date foreigners have been net buyers of R35.171bn of local bonds‚ excluding repo transactions. In 2011 they were net buyers of R47.359bn worth of local bonds‚ excluding repo transactions.
In the year to date foreigners have been net buyers of R31.842bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.
“The rand and bonds had strengthened in late afternoon trade on Thursday on the back of the Chinese rate cut‚ but US Federal Reserve chairman Ben Bernanke poured cold water on this market exuberance in his testimony before Congress‚” a local trader said.
At 08:30‚ the benchmark R157 bond was trading at 6.255% from Thursday’s close of 6.230%‚ Wednesday’s close of 6.260% and Tuesday’s close of 6.330%. The R207 was bid at 7.545% and offered at 7.515% from a previous close of 7.500% and the R186 was bid at 8.290% and offered at 8.260% from its close of 8.245%.
The rand was bid at R8.4187 against the dollar from Thursday’s close of R8.3966 and Thursday’s best level of R8.2154 and a worst level on Monday of R8.6291.
Emerging-market currencies gained on Thursday after China's central bank lowered its benchmark interest rates on loans and deposits‚ and moved to allow rates to float more freely‚ in a bid to support growth and advance reform of the financial system.
Standard Bank said in its morning comment the announcement that the Chinese central bank had decided to cut its benchmark interest rate by 25 basis points yesterday initially buoyed sentiment. This cut was the first since 2008.
“The euphoria proved short-lived‚ however‚ on concerns that the cut was a pre-emptive move ahead of expected investment and output growth figures tomorrow. The rally was further dampened by comments by Fed chairman Bernanke that the Fed would need to assess conditions before deciding whether to provide further monetary stimulus. These comments were widely interpreted as pouring cold water on the idea of a third bout of quantitative easing (QEIII) after several Fed officials had hinted at the possibility over the past few days.”
Dow Jones Newswires reported that the euro was lower against the dollar and yen during Asian trading on Friday as risk sentiment took a hit from the comments by Bernanke‚ who on Thursday stopped short of signalling that the Fed would take imminent action to support the US economy.
Elsewhere‚ Japan raised its first quarter GDP-growth estimate to an annualised 4.7% from the previous quarter‚ from an initial reading of 4.1%‚ largely because capital spending was revised upward.
Foreigners were net buyers of R707.57m of South African bonds including repo transactions on Thursday after net purchases of R2.962bn of local bonds on Wednesday‚ data released by the JSE show.
Nominal cumulative volume was R35.5bn on Thursday from R61.8223bn on Wednesday.
Foreigners were net buyers of R728.955m of South African bonds excluding repo transactions on Thursday net purchases of R2.951bn of local bonds on Wednesday.
For the year to date foreigners have been net buyers of R35.171bn of local bonds‚ excluding repo transactions. In 2011 they were net buyers of R47.359bn worth of local bonds‚ excluding repo transactions.
In the year to date foreigners have been net buyers of R31.842bn of local bonds including repo transactions. In 2011 they bought R37.501bn worth of local bonds.
