Rand bonds bid time ahead of risk events
The Rand and government bonds didn't change much on Monday.
JOHANNESBURG - South Africa's rand and government bonds were little changed on Monday, bidding time ahead of a data-heavy week that will drive direction.
The rand traded within Friday's levels and held below the psychologically important 11 mark - gains that were taken after a well-received interim budget from the finance minister last Wednesday.
At 1525 GMT, it traded at 10.9350, unchanged from its close in New York.
Yields on government bonds also traded within Friday's ranges, taking a break after rallying to their strongest in a year after the budget.
Analysts said South African markets have been sought out as the economy shows signs of recovery after being dragged to contraction in the first quarter by months of strikes in key sectors such as platinum mining.
However, the finance minister will have to live up to the fiscal commitments made in the budget.
"Despite these positive developments, there are still reasons to be concerned about South Africa. The economy is still only growing slowly and it remains to be seen whether the government will go through with its plan to reduce the budget deficit," said Jack Allen of Capital Economics.
Finance Minister Nhlanhla Nene made commitments to rein in government spending, raise revenue and support struggling state-owned companies without putting pressure on the budget last week, cheering the rand and bonds.
This week's events likely to move the rand will start with a speech by Deputy Governor Daniel Mminele to financial market professionals on Tuesday evening, followed by credit data and a central bank report on the banking system on Wednesday.
The back end of the week sees the release of third quarter jobless numbers and September producer inflation numbers, and closes with revenue collection figures and trade data on Friday.