Bonds firm on budget speech but steep yield curve remains a worry

Longer-dated bonds will likely continue to underperform as investors try to work out how the government will fund its larger borrowing requirements.

This came even as yields dropped on Wednesday after finance minister Tito Mboweni said in the supplementary budget that the government may approach international financial institutions to finance the country’s rising debt, allaying concerns that the Treasury may dig deeper into the local bond market.