The South African bond market was little changed on Tuesday morning but the short-term trend remained stronger after the National Prosecuting Authority’s (NPA) decision to drop charges against the Finance Minister Pravin Gordhan.
ETM Analytics market analyst Ricardo da Camara said risk premium had reduced following the NPA decision and that a stronger rand boded well for lower inflation expectations.
The yield on the R186 bond was at 8.710% in early trade‚ from 8.700% on Monday. The rand was at R13.49 against the dollar‚ from highs of R14.50 just more than two weeks ago.
Government bond yields in some of the developed markets were moderately higher on Tuesday morning‚ with the US treasury note yielding 1.8516%‚ from 1.8478% on Monday.
Analysts said investors would pay close attention to the Federal open market committee meeting that ends on Wednesday for any clues on rate hikes.