South African bonds were weaker at midday on Friday, taking their cue from the rand, which dropped to R14.05/$ after trading firmer earlier on Friday morning. The political uncertainty due to the fraud charges being laid against Finance Minister Pravin Gordhan has taken its toll on the rand and consequently bonds. However, neither bonds nor the rand are expected to make any drastic moves ahead of the medium-term budget policy statement next week. At 12.07pm the R186 was bid at 8.830% from 8.770% on Thursday. The R207 was bid at 8.09% from 8.03% on Thursday. The rand touched a firmest level of R13.8973/$ earlier on Friday. Bond yields fell on Thursday following the European Central Bank’s (ECB’s) announcement that it would keep rates unchanged at 0%. However, yields rose again later on Thursday after Reserve Bank governor Lesetja Kganyago said that although the interest rate hiking cycle had paused, the chances of a rate cut were slim, NKC Research analysts said. The benchmark US tre...
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