South African bonds were slightly weaker on Friday afternoon in risk-off trade following the Reserve Bank’s surprise decision on Thursday to keep rates on hold. Local bonds struggled to cling to earlier gains, despite a firmer rand, as the focus fell on political risk and geopolitical tension, after North Korea threatened to detonate a hydrogen bomb over the Pacific. At 3.10pm the benchmark R186 was bid at 8.46% from 8.44% and the R207 at 7.135% from 7.095%. The rand was at R13.2191 to the dollar from R13.2809. The market was awaiting UK Prime Minister Theresa May’s speech in Florence, in which she was expected to provide further detail on her approach to the Brexit negotiations, which had faltered on the EU’s demand for an upfront withdrawal payment. Media speculation is mounting about a £20bn payment as a starting point for negotiations, conditional upon access to the single market and some form of customs union. Barclays Research analysts said they expected an eventual figure in ...
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