South African bonds were steady in cautious early-morning trade on Monday as the market awaited fresh drivers. Foreign buying of local bonds was subdued last week, and locals remained net sellers. The local market was following positive global market sentiment towards bonds which has seen US and UK bond yields fall 29 and 20 basis points so far in 2017 as prices rise, despite the US Federal Reserve raising rates and the Bank of England (BoE) indicating it is set to do the same. The seeming disconnect is based on the view that the Fed will hesitate to implement its hawkish stance due to mixed US data and little indication that inflation is picking up. Despite the strength in the bond market, analysts expect some turnaround soon, in line with the Fed’s stance that inflation will rise over the longer term on present full employment. However, this has also not moved the market as low oil prices could fuel further disinflationary tendencies. "US long-term bond yields have fallen mostly i...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.