Bonds slightly weaker as focus shifts to economic data

Bonds were marginally worse shortly before midday on Monday‚ tracking the weaker rand as focus shifts to local and international data releases this week.

Bonds were marginally worse shortly before midday on Monday‚ tracking the weaker rand as focus shifts to local and international data releases this week.Picture FILE

Analysts said focus would shift to data releases‚ including US nonfarm payroll numbers expected on Friday‚ while local trade numbers are expected later on Monday.

The Reserve Bank said earlier on Monday that private-sector credit growth — consumers and business — moderated to an annualised 6.16% in June from 6.69% in May. This was less than the 6.5% forecast by analysts.

Credit growth was likely to improve in the months ahead following a surprise interest-rate cut earlier in July‚ and further reductions were expected‚ said Nedbank group economic unit analysts. Moderate credit figures provided further evidence that domestic economic activity remained subdued and inflation was improving‚ raising the prospect of further cuts in September and early in 2018‚ the analysts said.

Bonds were little changed against the dollar on Monday morning‚ but had sold on Friday after US GDP numbers and a Treasury switch auction.

The US economy grew 2.6% in the second quarter‚ from a revised 1.2% in the first quarter.

Feedback was also expected from the ANC lekgotla that took place at the weekend‚ which focused on the state of the economy. The outcome of the meeting was unlikely to move the market much‚ due to the implementation lag for policies‚ said Sasfin Securities fixed-income trader Alvin Chawasema.

At 11.30am the R186 was bid at 8.625% from Friday’s 8.58%. The R207 was bid at 7.415% from 7.36%.

The rand was at R13.0905 to the dollar from Sunday’s R13.0219.

BusinessLIVE

Source: TMG Digital.


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