South African bonds were marginally weaker on Tuesday morning, tracking the rand, as the market awaited risk events this week. The release of German and UK inflation data on Tuesday afternoon is expected to be closely scrutinised. Market commentators have ascribed recent dollar weakness to an expectation that monetary policy tightening in the eurozone will be faster than in the US this year. Local focus remains on ANC politics and the forthcoming monetary policy decision by the Reserve Bank on Thursday. As the market awaits the Reserve Bank’s decision, bonds were likely to consolidate at current yields, with a marginally positive inclination, as some analysts argued that the market was underplaying the potential for a rate cut, said Sasfin Securities bond analysts. At 9.30am, the benchmark R186 was bid at 8.520% from 8.495% and the R207 at 7.185% from 7.175%. The rand was at R12.3437 to the dollar from R12.3089. The US 10-year treasury was at 2.5439% from 2.5475%.
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