South African bonds were firmer shortly before midday on Wednesday, after a marginally softer than expected inflation report for July. Bonds were, however, expected to be range-bound ahead of the US Federal Reserve policy statement later on Wednesday. Markets were watching for direction from the Fed on future interest-rate increases, and the possible reduction of a $4.5-trillion balance sheet run-up after the 2008 financial crisis. The consumer price index (CPI) rose to 4.8% in August from a year earlier‚ Statistics SA said on Wednesday. That compares with an expectation that inflation would pick up to 4.9%, according to a consensus poll conducted by Bloomberg. The inflation print comes ahead of the Reserve Bank monetary policy committee’s decision on Thursday, where the Bank is widely expected to announce a cut of 25 basis points. Bonds appeared to be finding support, but most trading was likely to occur only after the Reserve Bank announcement on Thursday, said Rand Merchant Bank ...
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