* Government yield curve flattens
* Market expects rates to rise
* Rand sees best week since Nov
JOHANNESBURG, Jan 20 (Reuters) – South African market
players dumped shorter-dated bonds on Friday for the long end of
the curve after hawkish central bank comments on Thursday.
Shorter dated bonds are more sensitive to interest rate
expectations and the central bank’s view that the inflation
outlook has deteriorated hardened expectations of rate
increases.
The rand ended weaker against the dollar on Friday, losing
steam after hitting two-month highs of 7.8976 late on Thursday.
Even with Friday’s slight weakness, the rand ended the week
two percent firmer – its best week since late-November.
The yield on the shorter-dated 2015 bond was up
four basis points to 6.71 percent and that on the 2026 note
fell 4.5 basis points to 8.355 percent.
“The central bank was a lot more hawkish that people
expected,” Ion de Vleeschauwer, chief dealer at Bidvest.
Continued…
