Rand dips but bonds buoyed by eurozone woes

Johannesburg - The rand weakened on Thursday, but local bonds continued to draw buyers as investors' aversion for riskier yet higher-yielding assets eased, following weak inflation figures in the eurozone.

As of 06:25 GMT, the rand had softened 0.08% to R11.6895/$, remaining n a tight and likely to firm with some market watchers anticipating a correction in the high-flying dollar.

Data on Wednesday showed the euro zone slipped into deflation in 2014, for the first time since 2009,
increasing the likelihood of the European Central Bank printing money in a bid to stimulate economic activity.

Riskier emerging market assets were buoyed by the eurozone's woes, as well a pause in the slide of global oil prices, as investors sought higher yields, particularly in fixed income assets.

"Low oil means low inflation, means a stagnant global economic growth belief, means lower interest rates, means you gotta love South Africa's lucrative government bond yields," said Warrick Butler of Standard Bank in a note.

The yield on the benchmark government paper due in 2026 went to a fresh 1-month low early on Thursday at 7.715%, so far shedding 17 basis points in 2015.

In local data, South Africa's Chamber of Commerce and Industry (Sacci) publishes its December business confidence index at 07:30 GMT.