JOHANNESBURG, June 1 (Reuters) - The South African rand weakened slightly in early trade on Monday ahead of the release of a local manufacturing purchasing managers' index and vehicle sales data for May.
o At 0656 GMT the rand traded at 16.2450 against the dollar, roughly down 0.2% from its previous close.
o An Absa PMI survey is set to be released at 0900 GMT and will shed light on manufacturing conditions in Africa's most industrialised economy.
o Manufacturing sentiment improved in April, helped by a rebound in output and new sales orders.
o Investors will then turn their focus to vehicle sales data due around 1200 GMT, which will give a snapshot of consumer demand for big-ticket items.
o Car sales rose 13% in April. Nedbank economists in a research note forecast an 8.7% increase in May.
o "Despite mounting risks associated with fuel prices, their impact on headline inflation and the knock-on effect on interest rates, vehicle sales are expected to remain buoyant, supported by earlier interest rate cuts and an influx of affordable imported models," they said.
o Oil prices rose more than 2% on Monday after Iran and the U.S. traded strikes and Israel ordered troops to move further into Lebanon in the battle with the Tehran-backed Hezbollah militant group.
o "For now, the rand continues to use oil prices as its compass and will look to the Middle East for further guidance on direction," said ETM Analytics.
o South Africa's benchmark 2035 government bond weakened in early deals, with the yield rising 6.5 basis points to 8.45%.
(Reporting by Sfundo Parakozov; Editing by Jan Harvey)



















