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Bonds tad softer, eye US data

Sep 03 2010 10:27 I-Net Bridge

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Johannesburg - South African bonds were a tad weaker in thin early trade on Friday, which a trader attributed to some profit-taking.

The trader added that all eyes would be on key US jobless data out later in the day.

By 08:50 the benchmark R157 bond was bid at 7.280% from 7.265% at its close on Thursday. The benchmark R207 was unchanged at 7.995%, while the R186 was bid at 8.070% from 8.030%.

The rand was bid at R7.2130 to the dollar from R7.2265 at its previous close.

Dow Jones Newswires said that the monthly jobless data have a strong effect on the dollar's performance.

"Weakness on the employment front is taken as a signal that the US recovery remains tepid, which would encourage the Federal Reserve to keep US interest rates at record low levels to stimulate the economy," said Dow Jones Newswires.

A Dow Jones poll of economists forecasts the data to show a loss of 110 000 jobs in August from July, when payrolls also fell by 131 000.

"Trade is pretty thin at the moment, bonds are a touch weaker on some profit-taking. We're watching the US jobs data out later today, other than that it will be a quiet day with no local data or news for bonds to take direction from," said a local trader.

Foreigners were net buyers of R588.8m of South African bonds including repo transactions on Thursday, after net purchases of R1.281bn of local bonds on Wednesday Bond Exchange of South Africa statistics show.

Nominal cumulative volume was R45.040bn on Thursday from R21.270bn on Wednesday.

Foreigners were net buyers of R599.065m of South African bonds excluding repo transactions on Thursday, after net purchases of R1.513bn of local bonds on Wednesday.

In the year to date foreigners have been net buyers of R71.106bn worth of local bonds, excluding repo transactions.

So far for total transactions, including repo transactions, foreigners have been net buyers of R63.648bn worth of bonds.

In 2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo transactions, while for total transactions, including repo transactions, foreigners were net sellers of R2.424bn worth of bonds.

 
 
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