SOUTH African bonds were firmer late on Tuesday ahead of Wednesday’s budget.The local market was following a stronger rand and a favourable bond environment on subdued inflationary expectations in the US, which had been supporting US Treasuries for most of the month.The global carry trade in bonds, where money is borrowed in countries with low bond yields and then invested in high-yield markets, also favour local bonds.At 3.28pm, the benchmark R186 bond was bid at 9.135% and offered at 9.125% from Monday’s close of 9.180%.The middle-dated R207 was bid at 8.660% and offered at 8.645% from a close of 8.695% previously.The rand was at R15.1252 against the dollar from R15.1944.Investec economist Annabel Bishop said the stronger rand and lower bond yields were indicative of the market expecting a positive budget speech."Should the budget fail to deliver with a sharp cutback in current expenditure, the rand is expected to weaken again and bond yields to spike back up," Ms Bishop said.The ...
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