Disappointing data has traders on the hop
"THE country's going to the dogs", a senior bond trader complained this week. "Even the quality of leaked inside information isn't what it used to be."
He was referring to last week's CPI figure, which many traders expected to be substantially better than it finally was. This caused a flurry of selling on Thursday as perspiring bond dealers scrambled out of their personal long positions before devoting more of their time to the relatively mundane business of handling client orders.
It is possible that they got their faxes mixed up and thought they were looking at money supply figures, but all is fair in love and bonds and they will no doubt try to win it all back next week.
Apart from Thursday's little hiatus, the market has been moving in a narrow range, with the week's highs and lows on the R150 being 14.36% and 14.12% respectively.
For the terminally bullish and the hard of hearing, governor Chris Stals's speech at the Reserve Bank's annual meeting reiterated his firm stance on monetary policy, which suggests interest rates are unlikely to fall significantly before year-end.
The bond market has been drifting around the lower 14% range for about eight weeks now. Carry costs are still high, but despite that one analyst estimated that as much as a R20-billion nominal is being carried in the market every week. In less enlightened days this used to be known as a market overhang.