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Message to South African Bond Investors: It’s All About the Fed

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Forget about inflation, the current-account deficit and growth. Investors in South African bonds are only interested in one thing: the Federal Reserve.

While data on South African consumer prices and the balance of payments this week hardly moved the bond market, yields plummeted the most in 10 months the day after the Fed signaled it’s in no hurry to raise borrowing costs. South African interest-rate derivatives pushed out predictions of monetary tightening.