Fin24

Bonds weaker on US uncertainty

2012-11-08 09:33

Johannesburg - The South African bond market was weaker on Thursday morning as traders looked for direction after the hype of the US election wore off.

“Domestic bonds were steady to slightly weaker yesterday‚ following a week of steady gains‚” Absa Capital said in a note.

The bank said markets’ focus was again on the US fiscal cliff. “To the extent that progress remains uncertain‚ we expect that developments in the US to remain a risk factor for markets.”

At 08:00 the benchmark R186 was bid at 7.655% and offered at 7.640% from Wednesday’s close of 7.630%. The R157 was trading at 5.470%‚ unchanged from its previous close of 5.470%‚ and the R207 was bid at 6.470% and offered at 6.460%‚ from its previous close of 6.455%.

The rand was bid at R8.6352/$ from Wednesday’s close of R8.6375.

RMB said in a note: “More pressure may come from the R3b R206/R186 switch auction this morning at 10am‚ with the usual joker being the level that National Treasury sets where they will repurchase the R206s. If this level is set too high‚ as we have been seeing with the R201 buybacks‚ demand for the R186 will be patchy at best and at cheeky levels.”