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SAGBs Open Firmer, Retracing a Portion of Friday's Covid-Induced Weakness

SOUTH AFRICA
  • SAGBs open on the front foot this morning, bear flattening in early trading with 10-30Y yields down -6.3-7.2bp led by the 10Y.
  • This pares a portion of Friday's Covid-induced sell-off (+19-22.2bp) as markets restricted travel to SA ahead of its peak tourism season on new variant concerns.
  • This caused a notable steepening of the curve as markets priced out potential rate hikes with 3x6 forward rates dipping -13bp on the day to hover around +37bp.
  • Yields should continue to remain vulnerable to swings in risk sentiment and developments regarding the Omicron variant and its impact on travel. 10.40 is a key pivot resistance in the 10Y.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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