Markets were also abuzz with talk of the National Treasury tapping global markets for the first time since March with a 12-year eurobond issue worth as much as $1 billion.

IFR Markets, a Thomson Reuters bond analysis service, said the planned issue was priced 270 basis points over US Treasuries, down 5 basis points from initial pricing.

Ahead of the domestic bond auction, the yield on the 2015 bond was down one basis point to 6.885 percent, while that on the 2026 issue fell 0.5 basis points to 8.68 percent.

The government will issue 2.1 billion rand of bonds, split between the 2018 and 2031 issues. Results are out after 0900 GMT.

"I think demand will be pretty decent and an improvement from the last time," said Ion de Vleeschauwer, chief dealer at Bidvest Bank, although he added that Europe's rumbling sovereign debt crisis could still ruin the party.

A meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday did not yield significant results, he noted, but said there was "still some commitment from them not to let the European currency fail and that will probably support the bond market".

The rand was slightly firmer, reflecting broadly positive sentiment in global markets.

It was trading at 8.1270 against the dollar at 0642 GMT, 0.28 percent firmer than Monday's New York close of 8.15.

Though still thin, trading volumes are slowly returning to normal as traders come back from holidays.

On the data front, a Business Confidence Index at 0930 GMT will give clues on industry sentiment about the economy. New vehicle sales data for December will also be out at 1000 GMT to give clues on the demand conditions in the economy.