Rand firms after some ANC members decline MP positions
Local bonds strengthened after some ANC leaders that are seen as compromised pulled out of the ANC’s nomination list to parliament
The rand was firmer on Wednesday morning, with local bonds and the currency finding support after controversial ANC officials withdrew from the MP list on Tuesday.
Malusi Gigaba, who has previously been finance minister and home affairs minister, and former National Assembly speaker Baleka Mbete withdrew their names from the ANC MP list on Tuesday.
This helped to improve sentiment, with local bonds firming as a result in late trade on Tuesday, said Nedbank Corporate and Investment Banking analysts.
Positive sentiment towards local assets continued on Wednesday morning, although global trade remains cautious ahead of minutes from the US Federal Reserve’s latest meeting. The rand should trade in a tight range ahead of this, said TreasuryOne senior dealer Andre Botha, although local inflation data later could move the market if it is surprising.
Consumer inflation, as measured by the annual change in the consumer price index, is expected to come in at 4.5% in April, according to the Bloomberg consensus, unchanged from March.
At 9.40am the rand was 0.19% firmer at R14.3649/$, 0.27% stronger at R16.0215/€ and 0.48% stronger at R18.1994/£. The euro was flat at $1.1153.
The benchmark R186 government bond had strengthened, with its yield falling 4.5 basis points to 8.42%. Bond yields move inversely to bond prices.
Global focus is also on the US-China trade war, although analysts noted fatigue regarding this issue was starting to set in and investors were looking for clear signs of how the conflict will unfold.