The South African bond market held steady on Thursday morning but was a lot stronger than it was a few weeks ago. The local fixed-income market went through the soft patch in the days following the unexpected election of Donald Trump as the US president in November. Trump had pledged to ramp fiscal spending, which analysts said would trigger much higher consumer inflation, thus inviting faster interest rate increases from the Federal Reserve than initially anticipated. These expectations initially supported the dollar to the detriment of the rand and other emerging-market currencies. But momentum around the dollar has waned, allowing the rand to recover from its lows of R14.65/$. The cloud that has been hanging around SA’s credit rating has also lifted, at least for now. Fitch and S&P Global Ratings affirmed the country’s foreign currency rating at investment grade recently, boosting sentiment. The yield on the benchmark R186 was 8.84% in early trade, unchanged from Wednesday. The E...
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