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Johannesburg - The rand and bonds started the week on a
slightly firmer note on Monday as investors returned to riskier assets again
after signs that European governments were returning to stability.
Local assets will take direction mainly from overseas
developments this week as the local economic calendar is largely bare expect
for retail sales data out on Wednesday.
Finance Minister Pravin Gordhan will speak at two events on
Monday at around 07:00 GMT and 10:00 GMT.
There have been positive reactions to a new government in
Italy expected to implement reforms to end a debt crisis and a new Greek
minister who should push through austerity measures to restore the country’s
credibility.
The rand was trading at R7.89, little changed from Friday's
close of R7.8940.
The R7.80 level is the immediate resistance level for the
rand. It has tried and failed several times to break through and should it
conquer it, with R7.72 the next major hurdle, analysts said.
Local stocks looked set for a positive start at 07:00 GMT.
The JSE's Top 40 - (Tradeable) [JSE:J200] December futures contract was up
0.65% before the market opened.
On bonds, the yield on the 2015 bond slipped 0.5 basis
points to 6.59% and that on the 2026 issue fell one basis point to 8.35%.
“There’s a little bit of stability starting to come back in
the eurozone and risk is back on but it’s early days,” said Marten Banninga,
head of bond trading at World Wide Capital Securities.
“The South African bond market will trade a touch stronger
from the weakness we saw after the unchanged rate decision on Thursday. The
market was more or less priced for a possible rate cut, and after that did not
happen, the market corrected.”
Yields rose to two-week highs on Friday as bond market players curbed expectations of a rate cut after the Reserve Bank said inflation would be above the 3% - 6% target for longer than previously forecast.
