* Rand worst performer in basket of 20 EM currencies
* Bonds tumble, yields jump to mid-December highs
* Concern over slowing China growth hits commodity
currencies
JOHANNESBURG, March 20 (Reuters) – South Africa’s rand fell
more than one percent against the dollar on Tuesday, breaking a
3-day advance and ending as the weakest performer in a basket of
20 emerging market currencies as the greenback rallied and
concern about Chinese growth hit commodity currencies.
Government bond prices fell sharply, pushing yields to their
highest levels since mid-December as the market saw it as highly
likely the Reserve Bank would resume monetary tightening by
yearend.
The yield on the benchmark three-year bond jumped
10 basis points to 6.945 percent, its highest level since Dec.
15 according to Reuters data.
The 14-year paper climbed 11 basis points to
8.545 percent.
Local debt has sold off strongly since last week, when
slightly more hawkish remarks on rising inflation by Reserve
Bank Governor Gill Marcus, who is generally seen as dovish, got
market players thinking interest rates could start rising after
being kept on hold for nearly 1-1/2 years.
“Right now the market is looking for a hike in the next nine
months, so looking to December the market is now fully priced
for a 50 basis point hike from the Reserve Bank,” ETM market
analyst Chris Becker said.
Continued…
