* Market pauses after strong mid-week rally
* Focus back on global trends, mainly Spanish auction
JOHANNESBURG, April 19 (Reuters) – The rand was a bit
firmer against the dollar early on Thursday and government bonds
were largely steady, with market focus firmly back on euro zone
developments after a raft of positive local news buoyed assets
earlier in the week.
The rand traded 0.2 percent firmer at 7.8295 by
0657 GMT compared with Wednesday’s close at 7.8452.
The yields on the benchmark three-year and 14-year
bonds were each flat at 6.505 percent and 8.165
percent respectively.
Traders said the market was taking a breather after local
assets rallied sharply on news that up to $9 billion of
portfolio flows could enter the country if Citigroup’s includes
local bonds in its World Government Bond Index.
The main focus on Thursday will be on the results of a bond
auction in Spain – a crucial test of investors’ appetite for
risk, which has been heavily battered in recent months by the
prospect of debt defaults in some euro zone countries.
“(The) news flow has turned in favour of the rand recently
(but) global factors could yet trip up the currency,” said
Standard Bank strategist Nomvuyo Guma.
“Apart from the Spanish auction, today’s U.S. data is likely
to dictate the market’s direction along with a slew of speakers,
including the IMF’s Lagarde.”
(Reporting by Stella Mapenzauswa; Editing by Jon Herskovitz)
© Thomson Reuters 2012 All rights reserved
