Back To Home Page Playing the monetary policy game THE bond market continued to range-trade last week. There was a little buying midweek on the back of rand strength and improved foreign reserves but certainly not enough to bring bond rates down significantly and profit-taking soon drove them back up again. The market remains jobber dominated and local fund managers are still showing scant interest in bonds, either as buyers or sellers, at these levels.
Foreign buyers are even more scarce, and are likely to remain so.
Unfortunately, the market seems doomed to remain in the doldrums for the forseeable future and there is little scope for anything more than some agile intra-day trading. As usual, it is the money market that's to blame. Last week's rise in producer price inflation has supposedly made an immediate drop in short-term rates unlikely . . . The Reserve Bank's repo rate also fell slightly during the week. Unfortunately, monetary policy is a double-edged sword.