* Rand lacks momentum, liquidity thin
* Bonds firm a bit, next auction in 2012
JOHANNESBURG Dec 19 (Reuters) – South Africa’s
government bonds firmed slightly on Monday, recouping some of
last week’s losses and the rand was stuck in tight ranges in
thin trading conditions with many dealers off on holiday.
Yields on domestic debt hit multi-week highs last week as
data showed consumer inflation hit 20-month highs and was set to
climb further, diminishing lingering hopes of a rate cut.
“Local bonds are oversold, and it would not be surprising to
see further gains in the week ahead,” Tradition Analytics said
in a note.
The yield on the 2015 bond fell three basis points
to 6.91 percent while the yield on the 2026 issue was
down five basis points to 8.655 percent.
The local market is quiet and the next bond auction will be
in the New Year.
South African bonds have weakened this year and there is
little respite seen in 2012 if the European debt crisis
continues and the rand maintains a weaker tone.
The rand was trading at 8.3780 to the dollar at
1555 GMT, not far from Friday’s New York close of 8.3750.
The rand is poised to end the year more than 20 percent
weaker against the dollar, its worst yearly performance since
2008, after hitting a 2-1/2 year low of 8.61 in November.
Its volatility has helped to boost the currency derivatives
market, with the value and volumes traded soaring as market
players use those instruments to hedge against the rand’s
gyrations.
(Reporting by Phumza Macanda; editing by Anna Willard)
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