* Rand could gain as global risk appetite improves
* Bonds weaker as investors favour U.S. Treasuries
JOHANNESBURG, March 12 (Reuters) – South Africa’s rand
was largely flat against the dollar in early Monday trade but
government bonds weakened, with investors opting for U.S.
Treasuries as data pointed to a better outlook for the world’s
largest economy.
By 0712 GMT the local currency was at 7.5745 to the
greenback, barely changed from Friday’s closing level of 7.5735.
In the fixed income market, the yield on the benchmark 2015
bond added one basis point to 6.68 percent and that
for the 14-year paper was up 1.5 basis points at 8.315
percent.
Traders said local bonds were moving in direct contrast with
U.S. Treasuries which ticked up, partly boossted by weak trade
data from China.
“There’s nothing on the local front to drive our market
either way, we’re taking our direction from overseas,” a trader
in Johannesburg said, adding the outlook on domestic rates was
unchanged, with the Reserve Bank seen maintaining its “on-hold”
stance on rates this year.
The rand could rally this week as a more favourable outlook
for the U.S. — after better-than-expected jobs data on Friday
— lifts risk appetite global.
“We expect the rand to enjoy a firmer bias this week and
still believe that it is headed higher over the medium term,
especially now that sovereign debt concerns in Europe seem to
have been put on the back burner and some respite in oil price
rises,” Absa Capital said in a note.
(Reporting by Stella Mapenzauswa; editing by David Dolan)
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