South Africa bonds fall
South Africa
government’s bonds fell sharply on Friday, driving yields to their
highest level in 7 months after Central Bank comments on rising
inflation pressures dented prospects of interest rates cuts.
The bond sell-off,
a day after the Reserve Bank left its repo rate steady at 5.5 percent,
weighed on the rand, pushing the currency to a near 8-week low against
the dollar at one stage.
Stocks ended
higher, snapping two days of declines as firmer commodity prices and
upbeat global equities lifted sentiment, with technicals pointing to
further gains.The yield on the benchmark 2015 bond soared to 7.905
percent, up 22.5 basis points from Thursday’s close and reaching its
highest level since early July 2010.“The Reserve Bank left rates
unchanged and the market feels they are now looking ahead and seeing
higher inflation. It looks like there will not be any more rate
cutting,” a bond dealer in Johannesburg said.
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