South Africa 10-Year Bond Yield Edges Down

South Africa 10-Year Bond Yield Edges Down

South Africa’s 10-year government bond yield eased to around 8.78%, close to its lowest since September, tracking other peers.

Falling prices of crude oil amid hopes of easing geopolitical tensions in the Middle East helped to alleviate concerns over energy disruptions and inflationary pressures.

Meanwhile, attention turns to domestic inflation data and the South African Reserve Bank's decision, both set for September 23rd.

While consumer inflation eased to 4.3% in July from 5% in June, is expected to rise again in August following domestic diesel-price adjustments.

A 25 bps rate hike could be on the table for South Africa this week, as markets increasingly expect the central bank to tighten policy amid renewed inflation concerns driven by higher oil prices and the Federal Reserve’s latest move.

Although inflation expectations came in slightly lower in Q3, rising oil prices remain a key risk ahead while economic activity remains weak.

The SARB's decision is still uncertain.