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Bonds weaker, rand steady

Johannesburg - Bonds weakened and the rand was steady on Wednesday with dealers on the sidelines, waiting for Finance Minister Pravin Gordhan’s budget speech at 12:00 GMT.

The market was also looking for inflation numbers at 08:00 GMT, with the economists estimating the data to show inflation edging up to 6.2% year-on-year in January.

Gordhan is expected to announce that the budget deficit should widen in 2012/13 financial year. Market players will be looking for how government plans to fund an expensive infrastructure spending project proposed by President Jacob Zuma this month.

“It is budget day, so nothing is going happen until 12:00 GMT. The guys are going to wait on the sidelines and see what Mr Gordhan has got up his sleeve,” said a Johannesburg dealer.

Yields rose, with the 2015 bond yield up three basis points to 6.645% and that on the 2026 issue up by the same margin to 8.26%.

On the currency, the rand was steady but could weaken after the budget. At 06:43 GMT, it was trading at R7.72 against the dollar, from Tuesday’s close of R7.74.

“Once budget details are known, the risk is tilted towards rand weakness rather than strength,” said Tradition Analytics in a note.

On the bourse, the JSE’s blue chip Top 40 - (Tradeable) [JSE:J200] March futures contract inched up 0.16% before the 07:00 GMT start of trade, pointing to a slightly positive start.

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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.2%
Platinum
908.50
+1.3%
Palladium
1,017.25
+1.5%
Gold
2,220.32
+1.2%
Silver
24.84
+0.8%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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