South African bonds were marginally weaker on Monday morning with markets focused on US Federal Reserve chairperson Janet Yellen’s speech later in the day. The rand, which bonds usually track, was however slightly firmer. Markets are concerned the Fed may continue with its interest-rate increase cycle despite lacklustre economic data. Momentum SP Reid analysts said the generally lower yield environment continued to encourage support for US risk assets as the market remained of the view that the Fed would need to hold back on its interest-rate increases if macroeconomic data remained lacklustre. Rand Merchant Bank analyst Deon Kohlmeyer said Tuesday should be another quiet day in the bond market, with the rand holding below R13 to the dollar. At 9.03am the R186 was bid at 8.5% from Monday’s 8.495% and the R207 at 7.45% from 7.435%. At the same time, the rand was at R12.8283 from Monday’s R12.861. US 10-year treasuries were bid at 2.1336% from 2.1451%.
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