South African government bonds were weaker on Monday morning, in line with a more than 1% slide by the rand against the dollar, as US Treasuries edged closer to the 3% mark. The increase in US Treasury yields comes amid expectations of faster US Federal Reserve monetary policy tightening, analysts say, as there is concern that US inflation could overshoot the Fed’s target of 2%. Despite this pressure, local factors remained supportive of SA’s bonds, said Rand Merchant Bank’s Gordon Kerr. The question most investors were asking was what would break bonds out of their current range, he said. Foreigners were net buyers of local bonds last week, to the tune of R3.19bn, according JSE market statistics. The focus this week is expected to be on a summit between the US and North Korea, while US inflation data is due on Friday. At 10.02am the R186 was bid at 8.13% from 8.025% and the R207 at 7.02% from 6.925%. The rand was at R12.2555 to the dollar from R12.0596. The US 10-year Treasury was ...
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