South African bonds weakened shortly before midday on Wednesday, after a July inflation report raised prospects of another interest-rate cut this year. Inflation moderated to an annual rate of 4.6% in July, as expected‚ the lowest level since September 2015‚ from 5.1% in June‚ according to Statistics SA data. July’s report should be enough to guarantee another interest-rate cut, but this was likely to be in November, said Rand Merchant Bank analyst John Cairns. Economists surveyed by Reuters last week, however, expected the Reserve Bank to ease monetary policy as early as September. Event risk for the bond market was very focused on inflation, but some volatility could be expected in coming sessions due to global data releases, and the start, on Thursday, of the Jackson Hole central banker conference, said Cairns. At 11.36am, the benchmark R186 government bond was bid at 8.54% from 8.52%. The R207 was bid at 7.31% from 7.285%. The rand was at R13.2394 from R13.2238.
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