South African bonds were weaker in late afternoon trade on Thursday as European Central Bank (ECB) president Mario Draghi warned of lower growth in the euro zone.
The euro weakened modestly following comments by Draghi during his testimony at the EU parliament.
Draghi stressed "clearly visible" downside economic risks stemming from global growth and trade and reiterated that inflation dynamics in the euro area have weakened somewhat.
Market expectations for a 10 basis points cut in December were further reinforced after the speech. "Our economists continue to expect a time extension of ECB QE (quantitative easing) and a 10 basis points deposit rate cut in December‚" Barclays Research said in a note.
At 3.30pm‚ the benchmark R186 was bid at 8.570% and offered at 8.550% from Wednesday’s close of 8.530%.
The middle-dated R207 was bid at 7.960% and offered at 7.940% from a previous close of 7.900%.
The market is also keeping an eye on speeches by US Federal Reserve chairwoman Janet Yellen‚ vice chairman Stanley Fischer and regional Fed presidents William Dudley‚ Charles Evans and Jeffrey Lacker‚ which are expected to reinforce the market view that a rate hike in December is imminent.
- ©BDlive 2015
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