The South African bond market steadied on Monday, with market participants appearing reticent to adopt new positions ahead of potential market-moving events later in the week. Markets are likely to pay attention to the language of the Reserve Bank’s monetary policy committee, which is widely expected to leave the repurchase rate unchanged on Thursday. The Bank’s rate-setting committee meeting, starting on Tuesday, comes against the backdrop of renewed volatility in the rand, which has the potential to derail the receding inflationary pressures. The price of Brent crude touched $54 for the first time since April 6 ahead of the Opec meeting on Friday, which is expected to cut supplies by six to nine months. Higher oil prices, along with a weaker rand, bode ill for the outlook on inflation. Higher inflation in turn reduces the value of bonds. The uncertainty surrounding the rand, with the Moody’s rating review still pending, would make the committee very cautious to change any policy s...
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