South African bonds were weaker at midday on Wednesday despite a flat rand, as favourable sentiment towards emerging markets weakened after US Federal Reserve chairwoman Janet Yellen reiterated her hawkish stance on interest rates. Analysts said the market took an initial hawkish view on Yellen’s speech, but that could change as she did emphasise that interest rates were likely to remain near historical lows, notwithstanding any further increases. US Treasuries weakened after the speech, which pointed to the US bond market buying into Yellen’s hawkish stance, although considerable scepticism remained. Yellen’s speech in London had failed to inspire any further confidence in the greenback, which continued to trade on the back foot, said Rand Merchant Bank (RMB) analyst Gordon Kerr. He said the key question remained what this meant for the local bond market. "Recent sharp sell-offs on the back of political headlines have been taken in stride, and continued consolidation at present lev...
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