South African government bonds were little changed on Wednesday morning, ahead of a number of risk events later in the day, notably the tabling of the budget. This year’s budget will be more closely scrutinised than usual, as the government seeks to rein in a budget deficit that has put SA at risk of falling off global bond indices, through the downgrade of South African debt to subinvestment grade. Analysts said both the rand and local bonds continued to find support from positive local developments, but volatility could return to the market later in the day. Bonds had attracted primarily local interest during Tuesday’s government bond auction, said Sasfin Securities bond analysts. Longer-dated bonds had lagged a little, with investors expecting an announcement of a longer-dated bond in the budget, SA’s inflation data for January is also expected at 10am. Economists’ consensus forecast of 4.2% — well within the Reserve Bank’s target band of 3%-6% — although the Bank has previously ...
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