The South African bond market was slightly firmer at the beginning of the second week of 2017 with the market betting on a continued strong performance by local bonds this year. At 11.40am the benchmark R186 was bid at 8.810% from 8.825% and the R207 was bid at 8.015% from 8.025%. The R186 delivered growth of 8.71% last year. The JSE all share was flat. "We consider local bonds to have an attractive risk-return profile against the backdrop of the ongoing global carry trade and an improving envisaged domestic inflation and policy rate profile," Momentum Investments said in a note. The performance in the bond market will be closely linked to the envisaged policies of US president-elect Donald Trump. He is set to assume office on January 20. US treasuries have been weakening since Trump was elected on November 8 in anticipation of loose fiscal policies to be followed under his administration. This could have inflationary consequences, with US bond market adapting accordingly. The US Fe...
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