Bonds stable as ANC meeting about Jacob Zuma gets under way
South African bonds were firmer on Monday afternoon, as the market waited for developments from an ANC meeting regarding the fate of President Jacob Zuma.
Members of the ANC national executive committee (NEC) are meeting in Pretoria to discuss Zuma on Monday afternoon, with reports suggesting that he could agree to resign as early as Monday evening. It is believed the meeting got under way shortly after 2pm.
Analysts said the rand was set to benefit from a positive outcome by the NEC, and a rally by the rand would be bond-friendly.
Globally, focus is on whether volatility will return to global equity markets this week, after a sharp sell-off last week.
A key event being watched is Wednesday’s US inflation data. US bond yields have spiked on the expectation of higher inflation, which would warrant more aggressive increases from the US Federal Reserve.
FxPro analysts said the inflation data was crucial, changing the attractiveness of bonds for investors, something that would spill over into currency and equity markets.
Analysts have noted the rand, and other emerging-market risk currencies, had been remarkably stable during last week’s volatility.
At 3pm, the R186 was bid at 8.40% from 8.44% and the R207 at 6.995% from 7.030%.
The rand was at R11.9625 to the dollar from R12.0311.
The US 10-year treasury was last seen at 2.8839% from 2.8566%.