The South African bond market was on the defensive on Monday morning after foreigners dumped a net R9bn in local bonds last week. Sentiment towards emerging markets has turned negative since Donald Trump’s presidential victory last week, with analysts expecting an acceleration in inflation that would probably lead to frequent increases in US interest rates. Higher US rates make the dollar more appealing as they boost returns on assets denominated in the currency. "While he may appear to be dialling down some of his more radical protectionist policies, which allow people to focus more on his pro-growth plans, markets may still be getting a little ahead of themselves," Oanda senior market analyst Craig Erlam said. "We still need to wait and see how he’s going to work with Congress and how much fiscal slack he’s going to be afforded in order to fund these ambitious stimulus plans." The yield on the R186 benchmark was at 9.270% in early trade, from 9.120% on Friday. The US 10-year note,...
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