Bond market frets over growth outlook and inflation
Multiweek lows come days after major central banks signalled urgency in the fight against runaway inflation
SA’s benchmark bond yields fell to multiweek lows as market concern that a possible recession in the US and Europe might further upend a struggling local economy appeared to outweigh fears of accelerating global inflation, which is making central banks increasingly hawkish.
The yield on SA’s R186 bond, which matures in December 2026, slipped 6 basis points (bps) on Monday to close at 8.76%, equalling the level on August 25, the lowest close since August 17. The yield on SA’s 2032 bond fell even more, losing 13 bps to 10.64%, the lowest since August 18. Yields fell across other areas of the SA sovereign yield curve on Monday, with Bloomberg reporting that four-year yields dropped 7 bps to 8.75% while 20-year yields shed 10 bps to 11.22%...
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