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Johannesburg - South African bonds were on the back foot in early trade on Wednesday as inflation and rate concerns upset the applecart, together with contagion from the US.
By 09:17 the benchmark R157 bond was at 7.460% from its previous close of 7.370%, while the R207 was bid at 8.295% from 8.195% at its previous close. The R186 was bid at 8.465% after closing at 8.365%.
The Federal reserve kept rates on hold late last night at 0.25%, but concerns have arisen about their ability to pay down their debt programmes going forward as inflation starts to potentially tick higher. This sentiment filtered through to the SA market.
"Our weakness is linked to the US. It looks like that market is very fragile and vulnerable. The amount of ground lost by US Treasuries is significant if you translate it into our terms. It is about sentiment, but also the impact on the interest rate outlook. Within five or six days the tune changed has changed in SA about another rate cut - views are now that inflation has bottomed. On top of that we still have a lot of issuance," said a local bond expert.
The rand was bid at R6.8427 to the dollar from its previous close of R6.8156.
Key SA data is PPI at 11:30.
South Africa's producer price index (PPI) is expected to have dipped slightly at 5.9% year-on-year (y/y) in November from the 6.4% y/y seen in October, a survey by I-Net Bridge has found.
Forecasts among ten leading economists surveyed ranged from 5.7% y/y to 6.4% y/y.
Foreigners were net buyers of R353.872m of South African bonds including repo transactions on Tuesday after net sales of R745.438m of local bonds on Monday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R72.324bn on Tuesday from R29.345bn on Monday.
Foreigners were net buyers of R348.986m of South African bonds excluding repo transactions on Tuesday after net sales of R695.559m of local bonds on Monday.
In the year to date foreigners have been net buyers of R66.966bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R54.656bn 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 R3.3bn worth of bonds.
By 09:17 the benchmark R157 bond was at 7.460% from its previous close of 7.370%, while the R207 was bid at 8.295% from 8.195% at its previous close. The R186 was bid at 8.465% after closing at 8.365%.
The Federal reserve kept rates on hold late last night at 0.25%, but concerns have arisen about their ability to pay down their debt programmes going forward as inflation starts to potentially tick higher. This sentiment filtered through to the SA market.
"Our weakness is linked to the US. It looks like that market is very fragile and vulnerable. The amount of ground lost by US Treasuries is significant if you translate it into our terms. It is about sentiment, but also the impact on the interest rate outlook. Within five or six days the tune changed has changed in SA about another rate cut - views are now that inflation has bottomed. On top of that we still have a lot of issuance," said a local bond expert.
The rand was bid at R6.8427 to the dollar from its previous close of R6.8156.
Key SA data is PPI at 11:30.
South Africa's producer price index (PPI) is expected to have dipped slightly at 5.9% year-on-year (y/y) in November from the 6.4% y/y seen in October, a survey by I-Net Bridge has found.
Forecasts among ten leading economists surveyed ranged from 5.7% y/y to 6.4% y/y.
Foreigners were net buyers of R353.872m of South African bonds including repo transactions on Tuesday after net sales of R745.438m of local bonds on Monday, Bond Exchange of South Africa statistics show.
Nominal cumulative volume was R72.324bn on Tuesday from R29.345bn on Monday.
Foreigners were net buyers of R348.986m of South African bonds excluding repo transactions on Tuesday after net sales of R695.559m of local bonds on Monday.
In the year to date foreigners have been net buyers of R66.966bn worth of local bonds, excluding repo transactions.
So far for total transactions, including repo transactions, foreigners have been net buyers of R54.656bn 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 R3.3bn worth of bonds.
