Bond rates moved up moderately in March. The yield on the benchmark R153 bond rose from 7.98% at the beginning of the month to 8.19% at the end of the month. The yield on the longer dated R157 bond rose over the month from 7.63% at the end of February, to 7.84% by the end of March. The Rand weakened against the US dollar from 7.24 to 7.27 during the month. Against Sterling the Rand weakened from 14.21 to 14.34 over the month, and against the Euro from 9.56 to 9.69.

Over the next few months the direction of movement for the Rand and bond market will be largely determined by the increase in Consumer Price Inflation. Several negative factors such as higher petrol prices, rising food prices and higher administered prices could push CPIX above the SA Reserve Bank's upper limit of 6%, which may trigger off further interest rate rises if the Reserve Bank believes that the rise in inflation may persist. Technical factors, such as a shortage of supply of government bonds may also influence the bond market.

The Absa Bond Fund outperformed the All Bond Index, with a negative 0.2% return for the month, better than the loss of 0.4% from the benchmark All Bond Index, but nevertheless a loss.

The Fund remains cautiously positioned, with a duration that is moderately underweight the All Bond duration.

Bond rates moved up moderately in March. The yield on the benchmark R153 bond rose from 7.98% at the beginning of the month to 8.19% at the end of the month. The yield on the longer dated R157 bond rose over the month from 7.63% at the end of February, to 7.84% by the end of March. The Rand weakened against the US dollar from 7.24 to 7.27 during the month. Against Sterling the Rand weakened from 14.21 to 14.34 over the month, and against the Euro from 9.56 to 9.69.

Over the next few months the direction of movement for the Rand and bond market will be largely determined by the increase in Consumer Price Inflation. Several negative factors such as higher petrol prices, rising food prices and higher administered prices could push CPIX above the SA Reserve Bank's upper limit of 6%, which may trigger off further interest rate rises if the Reserve Bank believes that the rise in inflation may persist. Technical factors, such as a shortage of supply of government bonds may also influence the bond market.

The Absa Bond Fund outperformed the All Bond Index, with a negative 0.2% return for the month, better than the loss of 0.4% from the benchmark All Bond Index, but nevertheless a loss.

The Fund remains cautiously positioned, with a duration that is moderately underweight the All Bond duration.

Bond rates moved up moderately in March. The yield on the benchmark R153 bond rose from 7.98% at the beginning of the month to 8.19% at the end of the month. The yield on the longer dated R157 bond rose over the month from 7.63% at the end of February, to 7.84% by the end of March. The Rand weakened against the US dollar from 7.24 to 7.27 during the month. Against Sterling the Rand weakened from 14.21 to 14.34 over the month, and against the Euro from 9.56 to 9.69.

Over the next few months the direction of movement for the Rand and bond market will be largely determined by the increase in Consumer Price Inflation. Several negative factors such as higher petrol prices, rising food prices and higher administered prices could push CPIX above the SA Reserve Bank's upper limit of 6%, which may trigger off further interest rate rises if the Reserve Bank believes that the rise in inflation may persist. Technical factors, such as a shortage of supply of government bonds may also influence the bond market.

The Absa Bond Fund outperformed the All Bond Index, with a negative 0.2% return for the month, better than the loss of 0.4% from the benchmark All Bond Index, but nevertheless a loss.

The Fund remains cautiously positioned, with a duration that is moderately underweight the All Bond duration.

Bond rates trended down in December. The yield on the benchmark R153 bond fell modestly over the month from 8,305% at the end of November, to 8,16% by the end of December. The Rand continued its recovery against the US dollar, strengthening from 7,16 to 6,97 to the US dollar during the month. Against Sterling the Rand improved from 14,09 to 13,66 over the month.

Over the next few months the direction of movement for the Rand and bond market will be largely determined by the frequency and size of interest rate hikes from the SA Reserve Bank. Technical factors, such as a shortage of supply of government bonds may also influence the bond market.

The Absa Bond Fund had a reasonable month, returning 1,4%, approximately in line with the 1,5% return of the All Bond Index. The Fund remains cautiously positioned, with a duration that is moderately underweight the All Bond duration.