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Johannesburg - South African bonds were slightly weaker in early trade on Thursday as the market treaded water ahead of an expected decision on on interest rates by Reserve Bank governor Gill Marcus later today.
The repo rate is expected to remain unchanged, according to a survey of eight leading economists by I-Net Bridge.
The rate was cut by 50 basis points to 5.5% in November, taking it to the lowest reading in almost 30 years and resulting in a real interest rate of about 1%. The bank has reduced the repo rate by 650 basis points since December 2008.
By 08:50, the benchmark R157 bond was trading at 7.790% from its previous close of 7.790%, while the R207 was bid at 8.680% from its previous close of 8.640%. The R186 was bid at 8.940 from its previous close of 8.910%.
The rand was bid at R6.9442 to the dollar from its previous close of R6.9160.
Standard Bank said in a morning report that despite a few recent speeches from South African Reserve Bank (Sarb) officials, there had been little in the way of guidance provided about monetary policy specifically since the last Monetary Policy Committee (MPC) decision in late January.
"Naturally, much has changed in the global landscape since then, and the market is hoping for a clear description of how the SARB views their stance evolving alongside these changes. Given that an unchanged repo rate has been assumed by the market for this meeting, this is the most that can be expected from today's events," it said.
Standard Bank added that it viewed the risks as being modestly tilted towards a steepening of the very short end of the curve, as even a realistic assessment of changes to the macro outlook from the MPC could warrant just such a cautious response from the Forward Rate Agreement (FRA) market.
Foreigners were net buyers of R79.761million rand of South African bonds including repo transactions on Wednesday after net purchases of R1.778bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R70.434bn on Wednesday from R185.104bn on Tuesday.
Foreigners were net buyers of R91.173m of South African bonds excluding repo transactions on Wednesday after net purchases of R1.734bn of local bonds on Tuesday.
For the year to date, foreigners have been net sellers of R13.990bn 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 R16.368bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
The repo rate is expected to remain unchanged, according to a survey of eight leading economists by I-Net Bridge.
The rate was cut by 50 basis points to 5.5% in November, taking it to the lowest reading in almost 30 years and resulting in a real interest rate of about 1%. The bank has reduced the repo rate by 650 basis points since December 2008.
By 08:50, the benchmark R157 bond was trading at 7.790% from its previous close of 7.790%, while the R207 was bid at 8.680% from its previous close of 8.640%. The R186 was bid at 8.940 from its previous close of 8.910%.
The rand was bid at R6.9442 to the dollar from its previous close of R6.9160.
Standard Bank said in a morning report that despite a few recent speeches from South African Reserve Bank (Sarb) officials, there had been little in the way of guidance provided about monetary policy specifically since the last Monetary Policy Committee (MPC) decision in late January.
"Naturally, much has changed in the global landscape since then, and the market is hoping for a clear description of how the SARB views their stance evolving alongside these changes. Given that an unchanged repo rate has been assumed by the market for this meeting, this is the most that can be expected from today's events," it said.
Standard Bank added that it viewed the risks as being modestly tilted towards a steepening of the very short end of the curve, as even a realistic assessment of changes to the macro outlook from the MPC could warrant just such a cautious response from the Forward Rate Agreement (FRA) market.
Foreigners were net buyers of R79.761million rand of South African bonds including repo transactions on Wednesday after net purchases of R1.778bn of local bonds on Tuesday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R70.434bn on Wednesday from R185.104bn on Tuesday.
Foreigners were net buyers of R91.173m of South African bonds excluding repo transactions on Wednesday after net purchases of R1.734bn of local bonds on Tuesday.
For the year to date, foreigners have been net sellers of R13.990bn 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 R16.368bn of local bonds. In 2010 they bought net R44.541bn worth of bonds.
