The bond market was firmer on Tuesday as the market followed a firmer rand as the possibility of unseating President Jacob Zuma in a secret vote in Parliament grew stronger.
The Constitutional Court has allowed parties to file opposing papers in the UDM’s urgent application on the debate of the motion of no confidence against Zuma.
Opposition parties have until April 21 to oppose the UDM’s application‚ which would likely lead to an extension of the scheduled vote on April 18. The UDM approached the court on Monday after National Assembly speaker Baleka Mbete refused its request for a secret ballot when MPs vote on the motion.
The rand firmed 1% against the dollar in response‚ reaching an intra-day best level of R13.7595 to the dollar.
At 3.37pm‚ the yield on the R186 was at 8.95% from 8.99% and the yield on the R207 was at 7.815% from 7.81%.
Trading in the bond this week has been dominated by last week’s double ratings downgrade. On Friday‚ Fitch revised SA’s foreign-currency and local-currency denominated debt downwards to sub-investment grade. This followed a similar revision by S& P Global a week earlier. Moody’s will be announcing its ratings grading in June.
The reaction in bonds so far has been muted. “With all the bad news out of the way‚ we could be set to grind lower‚ with bonds continuing to struggle to close to above the 9% level‚” said Rand Merchant Bank analyst Gordon Kerr.
US treasuries were sharply firmer on the weaker dollar. The 10-year bond yield was at 2.3250% from 32.3671%.
Bonds firmer as secret vote in Parliament looking more likely
The bond market was firmer on Tuesday as the market followed a firmer rand as the possibility of unseating President Jacob Zuma in a secret vote in Parliament grew stronger.
The Constitutional Court has allowed parties to file opposing papers in the UDM’s urgent application on the debate of the motion of no confidence against Zuma.
Opposition parties have until April 21 to oppose the UDM’s application‚ which would likely lead to an extension of the scheduled vote on April 18. The UDM approached the court on Monday after National Assembly speaker Baleka Mbete refused its request for a secret ballot when MPs vote on the motion.
The rand firmed 1% against the dollar in response‚ reaching an intra-day best level of R13.7595 to the dollar.
At 3.37pm‚ the yield on the R186 was at 8.95% from 8.99% and the yield on the R207 was at 7.815% from 7.81%.
Trading in the bond this week has been dominated by last week’s double ratings downgrade. On Friday‚ Fitch revised SA’s foreign-currency and local-currency denominated debt downwards to sub-investment grade. This followed a similar revision by S& P Global a week earlier. Moody’s will be announcing its ratings grading in June.
The reaction in bonds so far has been muted. “With all the bad news out of the way‚ we could be set to grind lower‚ with bonds continuing to struggle to close to above the 9% level‚” said Rand Merchant Bank analyst Gordon Kerr.
US treasuries were sharply firmer on the weaker dollar. The 10-year bond yield was at 2.3250% from 32.3671%.
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