Bonds wobble as rand slips to worse than R12/$

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South African government bonds were wobbly on Monday morning, at the start of a week packed with key data releases and event risks.

On Tuesday, Markets will pay attention to inflation data, which the Reserve Bank monitors to decide on interest rates.

Economists expect inflation to have moderated to an annual rate of 4.10% in February from 4.40% in January, with core inflation remaining steady at 4.10%.

Local bonds are sensitive to changes in interest rates, which the Bank’s monetary policy committee could announce early next week The yield on the benchmark R186 bond rose to 8.155% in early trade, from 8.11% at its last settlement, as the rand slipped through R12/$ for the first time in two weeks.

The US Federal Reserve will also conclude its scheduled policy meeting on Wednesday, with a 25 basis-points increase in rates expected.

But markets will, in particular, be focused on how the world’s most influential central bank intends to approach its policy.

Moody’s will wrap up the week with the release of its ratings review on SA.

Moody’s is the only major ratings agency to still rate SA’s debt at investment grade‚ after S&P Global Ratings and Fitch lowered it to junk in 2017.

The dominant view is that SA will dodge the ratings downgrade bullet, following a budget that stuck to fiscal consolidation and recent local political developments.

At 9.41am, the R207 was bid at 6.73% from 6.72%. The rand was at R12.0283 to the dollar from R11.999. – BusinessLive

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