A mixed week

Local financial markets were mixed, with the currency ending the week on a stronger note but equity and bond prices falling.

The Nedcor Economic Unit reports that the rand extended its gains against major currencies, closing firmer at R6,47 against the US dollar from R6,54 in the previous week.  
 

Against the euro, the domestic unit firmed to R7,93 from R8,01, and to R11,92 from R12,01 against the pound. 

Domestic bond prices closed lower, despite a stronger rand, with yields on the longer dated R153 2010 and the R194 2008 rising to 10,13% and 10,06% respectively from 9,94% and 9,86%.
 

Money market rates generally moved higher except for the yield on the 3-month NCD, which remained steady at 8,20%. 

The yields on the on the 6-, 9- and 12-month NCDs rose to 8,50%, 8,75% and 9,05% from 8,40%, 8,70% and 9,00% a week ago.  The 3-month jibar was unchanged at 8,10%.
 

A stronger rand and slightly lower precious metal prices pushed the domestic equity market down during the past week.  
 

The FTSE/JSE all-share index closed 1,1% lower on Friday at 10 191,3, while the resource index declined by 3,3% to 9 689,1 from 10 015,7 from a week earlier.  Gold stocks were down by 7,8% to 1 784,2 from 1 935,3. 
 

In contrast, financial stocks and industrials bucked the trend, managing modest gains of 0,1% and 0,5% respectively to close at 9 734,5 and 8 817,8 from 9 721,8 and 8 776,9 respectively.  
 

This week’s focus will be on the Reserve Bank’s Monetary Policy Committee meeting on Wednesday and Thursday. 
 

We do not expect the MPC to move on interest rates, on the relatively better short-term inflation outlook and stronger rand, with the repo rate remaining unchanged at 8,0%. 
 

Other economic releases due this week include manufacturing and mining production and sales data for April on Tuesday.