The Covid pandemic and severe economic challenges being faced by South Africa—mostly due to inappropriate policies and inept and corrupt politicians—have seen another potentially structural yield curve shift in SA bonds, from 2-3% to 4-6%. During 2019, lower US interest rates caused US bond yields (>10 years) to decline by around 100bp, while a further drop of 125bp occurred during the first half of 2020. US real yields became progressively more negative, reaching more than -5% in the final quarter of 2021 which served to maintain a high differential vis-a-vis SA bonds.
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