South African bonds were a lot stronger on Wednesday morning, with the yield on the benchmark R186 note slipping to its lowest level since October 2015. The rally in the local fixed-income market came as the rand flirted with R12/$ — levels last seen in 2015. Analysts say the stronger rand environment will contain inflation, thus opening the window for the Reserve Bank to cut interest rates, considered a boon for local bonds. Statistics SA will release inflation figures later in the morning, with economists expecting a slight increase in the numbers because of the recent fuel prices. Consumer inflation is expected to have accelerated to an annual rate of 4.7% in December, from 4.6% in November. The stronger currency and its effect on local bonds is mainly credited to the ANC’s new leadership; the party is seeking to redeem itself ahead of the general elections in 2019. New party president Cyril Ramaphosa has vowed to revive the economy and fight corruption, particularly within state...
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