South African bonds were range-bound at midday on Thursday as the market awaited the Reserve Bank’s interest rate announcement later in the afternoon. At 11.31am, the yield on the R186 was at 8.42% from 8.395% and the R207 was at 7.04% from 7.025%. The rand was at R13.3287 to the dollar from R13.3235. The market expectation is that the Bank will reduce the repo rate by another 25 basis points to 6.5%, as the inflation outlook improves. Consumer price inflation for August came in better than expected on Wednesday, when Statistics SA reported that inflation rose to 4.8% in August from a year earlier. The market had expected 4.9%. US bonds were firmer following the US Federal Reserve announcement on Wednesday to keep interest rates unchanged, which saw the 10-year bond yield touch 2.27%. The Fed announced the start of a winding-down process of its inflated $4.5-trillion balance sheet, which will entail the buy-back of bond securities, starting at a monthly $10bn. The bonds will not be ...
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