South African bonds were firmer on Thursday at midday in response to continued lower yields in US treasuries, as the market bought into US Federal Reserve chair Janet Yellen’s dovish stance. The firmer rand also supported the market as the local currency continued to strengthen in global risk-on trade, which has the dollar on the back foot. On Wednesday, Yellen said US interest rates need not move significantly higher from present levels and could soon hit a "neutral" level, which now was seemingly lower than the previously mooted 3%. US interest rates are now at a range of 1%-1.25%. The dovish message was in contrast to the Fed’s marginally hawkish message from June’s interest-rate increase. "The suggestion that the Fed’s balance sheet reduction would be gradual and that rates will, therefore, not need to rise to get to neutral immediately, drove risk assets firmer," Momentum SP Reid analysts said. Momentum said that implied higher liquidity for a slightly longer period than antici...
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