Bond market. Picture: ISTOCK
Bond market. Picture: ISTOCK

South African government bonds were marginally softer on Friday afternoon, tracking the weaker rand, with few major market drivers to provide direction.

US treasuries have, however, climbed towards the 3% mark, following data from the US on Thursday indicating the current underlying strength of the economy.

This pointed to faster monetary policy tightening in that country, with emerging-market bonds not unscathed, analysts said.

Risk assets have recently had a bumpy ride, with mixed corporate earnings in the US, even as treasury yields were climbing, FX Pro analysts said. Treasury yields and US equity markets usually move inversely to each other, and should this trend continue, a new fear could enter the market, that of stagflation.

Stagflation refers to a period of both high inflation and weak economic growth.

At 3pm the benchmark R186 government bond was bid at 8.02% from 7.99% and the R207 at 6.925% from 6.885%.

The rand was at R12.0462 to the dollar from R11.9579.

The US 10-year treasury was last seen at 2.9262% from 2.9112%.

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