South African markets reopened today after holidays on Thursday and Friday to a slightly firmer rand.

By 08.50am the rand was bid at 7.5659 to the dollar from a previous close of 7.5587. It was bid at 11.7158 to the euro from a previous 11.6679 and at 14.9500 against sterling from 14.9302 before.

The euro was bid at $1.5473 from $1.5428 overnight, while gold was quoted at $864.43 a troy ounce from $856.20/oz overnight.

ETM analysts said in their morning report that the US dollar's recovery remains the order of the day with currency speculators responding to suggestions that the Fed funds rate may have bottomed.

Last week's better than expected non-farm payrolls figure has however offered the USD some support as have comments by Berkshire Hathaway chairperson who indicated that the worst of the credit crisis may now be behind us.

With general levels of risk aversion subsiding, it does not come as much of a surprise to learn that equity markets have performed reasonably well through the course of the past two trading sessions.

"Against this backdrop, it is also not surprising to find the JPY firmly on the back foot having lost substantial ground in the past two trading sessions. With Japan on holiday for today and tomorrow, there is unlikely to be any change of the trend which continues to favour the carry trade boosting the prospects of higher yielding currencies such as the rand," they said.

For today, it will be difficult to ignore the public holiday in the UK which will also play a role in preventing any major move with trading in most currencies likely to be lethargic, they noted.

ETM expects the rand to trade in reasonably tight 7.50-60 range.

Bonds marginally weaker in thin trade

Bonds were marginally weaker in thin trade on Monday morning, with the flat rand and Bank holiday in the UK contributing to the decreased activity.

By 08.31am the short-term government R153 bond was at 10.360 percent from its previous close of 10.340 percent, while the medium-term R157 was at 9.500 percent, unchanged from its previous close. The longer-term R186 bond was bid at 9.375 percent from its previous close of 9.330 percent.

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