SOUTH African bonds were strongly firmer in Monday morning trade after the re-appointment of Pravin Gordhan as finance minister boosted confidence in the market.

Bond yields weakened to record lows on Friday afternoon as the rand crashed further on President Jacob Zuma’s decision to dismiss Nhlanhla Nene as finance minister on Wednesday night.

Mr Gordhan was re-appointed on Sunday night.

At 9.08am, the benchmark R186 was bid at 9.500% and offered at 9.400% from Friday’s 10.400%.

The middle-dated R207 was bid at 8.900% and offered at 9.760% from 9.775% previously.

The rand was at R15.1775 against the dollar from R15.1145 previously.

Analysts say the bond market has its eye on Wednesday’s expected US interest rate hike.

Barclays Research said in an early morning note that the Federal open market committee (FOMC) was widely expected to hike on Wednesday. With firm consensus on a 25 basis point hike, market attention had shifted to the Fed’s rate hike path.

The December 2016 Fed funds futures contract had just two hikes priced in for 2016, Barclays said.