The South African bond market was firmer on Monday at midday in cautious trade following the ratings reprieve from S&P Global Ratings on Friday. S&P downgraded the local currency to two notches above junk status, but did not downgrade SA’s creditworthiness to subinvestment grade. However, the agency maintained its negative outlook and many investors and politicians believe SA will be unable to dodge the ratings bullet for much longer if political instability remains a concern. At 11.28am the yield on the benchmark R186 bond was at 8.960% from 9.040%, and the yield on the R207 was at 8.180% from 8.265% on Friday. This was due to the stronger rand, which was at R13.8330/$. The US 10-year treasury was at 2.4013% from 2.3858% following Friday’s US nonfarm payroll data release, which showed that the US unemployment rate had fallen to 4.6%, its lowest level since 2007, before the global financial crisis, increasing the possibility of a US rate hike this week. Two major European events on ...
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