South African government bonds were weaker on Tuesday afternoon, as the benchmark US 10-year bond was poised to break through the 3% level.US bond yields have spiked sharply on inflationary concerns, brought about by higher oil prices.Renewed risk-on sentiment held US bonds back marginally on Tuesday morning, but local bonds were on the back foot as the Reserve Bank might walk away from further rate cuts.Foreign capital flows into the SA market ended last week on a positive note, with an inflow of R3bn driven by the local bond market as opposed to equities. Bonds reeled in R5.5bn worth of foreign capital, while the equities market shed R2.4bn. For the month to date, inflows remain positive.Local bonds have been the best-performing asset class so far in 2018, with the R186 breaking through 8% earlier in the year."The concern now is whether the rapid rally since the start of the year is sustainable," analysts at Nedbank Corporate and Investment Banking said.Risks include geopolitical ...
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