South African bonds maintained a firmer bias on Wednesday afternoon, riding the wave of a stronger rand that looks just about to rally through R13.20 to the dollar, marking a material improvement on lows of R13.54 last week. The stronger rand helps keep inflation in check, which make real returns in bonds relatively attractive. The rand extended gains following better-than-expected retail sales data. Retail sales grew at an annual rate of 2.9% in June, from 1.6% in May, its best level since November. The data provided a glimmer of hope to an economy that slipped into a technical recession in the first quarter. "Statistics out so far in the second quarter suggest that the economy fared better than in the first quarter, although the underlying pace of activity and overall confidence levels remain generally weak," Nedbank analysts said in a note. "Given that inflation is moderating and is expected to ease even further below the Reserve Bank’s upper 6% inflation targeting limit during t...
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