Every week we give you our summary of happenings in the bond market.
Economic data failed to feature last week; it was all about politics. As one would expect, bond yields soar causing the All Bond Index year-to-date return to tumble from 5.9% to 2.5%. Word has it that foreign investors do not care much about our politics, as the revived global reach for yield trade masks everything else. This is demonstrated by JSE foreign trading statistics and huge support at last week’s nominal bond auction on Tuesday. As bond managers, we are particularly disturbed by the serious negative implications for the very finely balanced fiscal outlook. International rating agencies just slipped further behind the sovereign ratings curve. Volatility with a weakening bias is expected to continue.