Bonds gain on Ja­panese data, rand falls

The Star Early Edition - - MARKETS - Reuters

YIELDS on bonds edged firmer while the rand soft­ened against the dol­lar yes­ter­day as in­vestors held off ahead of an in­ter­est rate decision by the cen­tral bank to­day.

Lo­cal bonds con­tin­ued to gain from de­mand for high­eryield­ing emerg­ing mar­ket as­sets after Ja­pan’s sur­prise slip into re­ces­sion, with the yield on the bench­mark pa­per due in 2026 fall­ing.

At 5pm yes­ter­day, the rand was bid at R11.0668 to the dol­lar, 6.57c softer than at the same time on Tues­day, rev­ers­ing gains that saw it reach a twoweek low against the green­back in the pre­vi­ous ses­sion.

But both the cur­rency and lo­cal bonds were lit­tle moved by con­sumer in­fla­tion data pub­lished ear­lier in the ses­sion, with head­line in­fla­tion at 5.9 per­cent year on year in last month, un­changed from Septem­ber and in line with mar­ket ex­pec­ta­tions.

An­a­lysts said the fo­cus would be on the de­tail con- tained in the cen­tral bank’s pol­icy state­ment when it an­nounces its fi­nal in­ter­est rate decision for the year – the first un­der new gov­er­nor Le­setja Kganyago.

“We’ve been in a wary mar­ket for the last cou­ple of days. Most peo­ple are re­luc­tant to get in­volved at the mo­ment be- cause of the MPC [mon­e­tary pol­icy com­mit­tee] to­mor­row [to­day],” said Dale Forssman, a bond trader at World Wide Cap­i­tal Se­cu­ri­ties.

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