SA bonds firmer as European Central Bank keeps rates unchanged
Local bonds were also steady on upbeat producer price inflation numbers with the PPI falling to an annual 3.7% in March from 4.2% in February
South African government bonds were firmer on Thursday afternoon in quiet trade ahead of the European Central Bank’s (ECB) latest forward guidance.The ECB kept rates unchanged, as expected, but European bonds were sharply firmer on expectations that ECB president Mario Draghi will paint a patient picture on the easing of stimulatory policies going forward.The German 10-year bund was last seen at 0.6181% from 0.6373% and the UK 10-year gilt at 1.5251% from 1.5393%."We know that the ECB is not ready to raise interest rates and they certainly don’t want to see the euro firming back above $1.24," said Kathy Lien, MD of FX strategy at BK Asset Management, in a note late on Wednesday. Yet it also wants to end quantitative easing purchases this year — so Draghi has quite a balancing act to do, she said.Firmer bonds in the US also helped create a more positive atmosphere in the local market after the 10-year slipped below 3% with buyers returning to the market again.Local bonds were also st...
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