Bonds weaker ahead of auction
DOMESTIC bond yields were higher on Tuesday morning ahead of the weekly auction.
At Tuesday’s nominal auction, Treasury will be looking to place R850m of R2030s, R850m of R2037s and R650m of R2048s.
"Although the duration of the Albi (all bond composite index) will increase this Thursday, the Govi (government bonds index) will remain broadly unchanged, which together with the rate hike fears leads us to believe that today’s auction of duration paper might not be particularly well received," Barclays Research said in an early morning note.
The Albi is an index containing the top 20 bonds ranked dually by liquidity and market capitalisation. The Govi contains all bonds issued by the South African government that fall into the top 10 positions of the Albi according to the dual-ranking scheme.
At 8.31am‚ the benchmark R186 was bid at 8.090% and offered at 8.080% from a previous close of 8.040%.
The middle-dated R207 was bid at 7.560% and offered at 7.550% from a Monday close of 7.520%.
There is little data due on the local or international front during the course of the day that could easily sway movements in the bond market.