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Johannesburg - Bonds rose on Thursday after
higher-than-expected inflation data in the previous session with trading
expected to be thin ahead of the Treasury’s release of the medium-term budget
later in the day.
The yield on the benchmark 3-year bond and the longer dated
14 year paper were both 2 basis points lower at 5.44% and 7.685% respectively.
By 06:51 GMT, the rand was trading at R8.73 to the dollar,
0.6% firmer than Wednesday’s New York close of R8.7810.
“The long end of the yield curve will be supported. There
may be a little bit of curve flattening,” said Michael Grobler, a fixed income
analyst at Afrifocus Securities.
“As long as the rand stays below R8.82, there’s going to be
demand for the long end of our yield curve.”
Finance Minister Pravin Gordhan faces the hard task of
balancing demands, in his mid-term budget speech, for increased social spending
from a restive population while reassuring investors and ratings agencies he is
committed to reining in the budget deficit.
The minister will deliver the medium-term budget at 12:00
GMT.
South Africa’s headline consumer inflation accelerated to 5.5% year-on-year in September from 5% in August, government data said on Wednesday.
