Published: 08 July 2013

South African government bonds retreated further on Thursday while the rand drifted near the previous session's four-day lows against the dollar, with pressure on riskier assets likely to persist ahead of key US jobs data due out on Friday.

The yield on the bond due in 2026, the market benchmark, edged up one basis point to 7.955%, as did the shorter-dated 2015 paper to 6.135%.

The rand recovered slightly after falling as much as 1% overnight.

The local currency traded at R10.06/$ by 08:28, up 0.1% from Wednesday's close at R10.07 in New York.

The dollar has been boosted this week by market expectations that US non-farm payrolls numbers due out on Friday will keep the Federal Reserve on track to scale back its monetary easing programme.

This would drain billions of dollars out of emerging markets that offer higher yields but are perceived to carry more risk than developed markets.

"Heightened global risk aversion, stemming from Egypt and Portugal would not have been supportive of risky assets such as the rand either," said Absa Capital in a note to clients, referring to political turmoil in the two countries.

"We believe more rand selling pressure is likely into tomorrow's all-important US employment report."
- Reuters

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