Who would have thought that SA10y would trade at the same yield today, than:
- Before it was downgraded to junk
- Before it added USD debt from the IMF (imminent)
- Before Covid depression
- DTOP has now bounced 37% from its March low.
- and is 10% below its 5-year average price.
- NOW, SA fund managers are bullish.
They also said they want to sell offshore assets, buy ZAR and buy SA equities & bonds
Could explain ZAR strength
Would target 5.40 (+26%) and would likely be driven by China slowdown-Coronavirus
Approximately 27% of Brazilian exports go to China
Currently 90m people in lock down and Bloomberg estimates 69% of Chinese GDP shut this week
Does it re-open next week or further lock downs?