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Johannesburg - The rand held steady near a month high on
Wednesday, having rallied with a stronger euro, while the local market was
closed for a holiday in the previous session.
Dealers expect improved global sentiment to support risky
assets this session.
The purchasing managers’ index (PMI) and vehicle sales for
April are due at 09:00 GMT. An upbeat PMI number should add some support to
rand as it points to better manufacturing data and improved gross domestic
product.
The rand was at nearly unchanged from its previous R7.7251
close and not far off the one-month high of R7.7151 hit on Tuesday.
“We believe the risk lies in extended rand strength today,
especially if this morning’s local manufacturing data also prove to be
encouraging,” Absa Capital said in note to investors.
PMI in March was down at 55.1 from 57.9 in February on
declining new sales orders and business activity.
The index, which gives insight on the manufacturing sector,
is expected to remain above the 50 level that indicates expansion.
Manufacturing contributes 15% to GDP.
Government bonds were slightly weaker with yields up one
basis point to 6.475% on the 2015 note and up two basis points on the 2026
issue.
Liquidity should start to come back in this session after
national holidays on Friday last week and Tuesday meant some dealers were away
from markets for three trading days.
Treasury is looking to sell R2.1bn spread between its 2021, 2026 and 2041 bonds at 09:00 GMT. Results will be out after auction closes. The Treasury will also announce its issuance plans for next week at 09:00 GMT.
