South African government bonds held broadly steady on Friday morning, showing no signs of stress even as global sentiment soured. The yield on the benchmark R186 bond was on cusp of the symbolic 8% mark, its best level since late February, according to the Iress data. Traders will pay close attention to the release of Moody’s long-awaited review of SA’s debt on Friday night, although the price action suggests the country will get a reprieve. Moody’s is only major ratings agency that has the country’s debt rating at investment grade, after S&P Global ratings and Fitch cut it to junk in 2017. Rand Merchant Bank analyst Deon Kohlmeyer said in an e-mailed note that the debate was not around whether the agency would downgrade SA, but rather whether the negative watch would be changed to a stable outlook. "The rand and bond markets both believe the downgrade risks to be negligible and indeed the rand has strengthened and the R186 again traded below 8% yesterday [Thursday], continuing on t...
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