CURRENCY PATROL LOCKDOWN DAY 39 07 HOURS 11 MINUTES
By the close of trade on Monday, the South African rand strengthened against the US dollar.
- In South Africa, the Absa purchasing managers index (PMI) dropped to record lows in April, as the national lockdown brought manufacturing activity to a near halt.
- Further, total vehicle sales fell in April.
- In the US, factory orders declined on a monthly basis in March and are expected to sink further, as disruptions from the coronavirus pandemic fracture supply chains and lead to lower exports.
- Warren Buffett praised the Federal Reserve for its actions to blunt the effects of the coronavirus but said he worries about the repercussions. Speaking at Berkshire Hathaway’s annual investor meeting Saturday, Buffett said companies struggling to make it through the current period of social distancing owe thanks to the Fed for providing low-interest financing that is helping keep them afloat. Without mentioning specific worries, Buffett said he is concerned about the longer-term ramifications.
- After months fixating on complex infection curves, ambiguous corporate announcements and haywire economic data, investors risk being blindsided by an old foe: U.S.-Sino tensions. President Donald Trump and his administration have been sharpening their criticism of Beijing, demanding answers about the origins of the coronavirus pandemic as the death toll approaches 70,000 Americans. That raises the specter of a resumption in the trade war at the worst possible time for global markets already pricing in heroic expectations of an economic rebound.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond advanced to 4.02% while that for the longer-dated 2030 issue fell to 10.17%.
In early trade on Tuesday, the US dollar is trading 0.6% lower against the South African rand at R18.4755, while the euro is trading 0.6% lower at R20.1549. The British pound has declined 0.4% against the South African rand to trade at R23.0230.
By the close of trade on Monday, the euro declined against most of the major currencies.
- Latest data showed that coronavirus lockdowns sent manufacturing activity to all-time lows in Germany, France, Spain and Italy during April.
- The eurozone manufacturing PMI fell in April as government-imposed lockdowns to stop the spread of the new coronavirus forced factories to close and consumers to stay indoors.
- Meanwhile, investor morale in the eurozone slightly improved in May, but the assessment of current conditions hit an all-time low as the euro bloc faces unprecedented challenges posed by the coronavirus crisis.
- Talks between the UK and the US on a post-Brexit trade agreement are to get under way on Tuesday. The early negotiations will take place by videoconference, due to the Covid-19 pandemic, with the first round of talks expected to last two weeks and further sessions approximately every six weeks. Ministers say they will drive a “hard bargain” as they seek to lower tariffs on exports and boost trade in services.
In early trade on Tuesday, the euro has marginally advanced against the US dollar to trade at $1.0909, while it has weakened 0.1% against the British pound to trade at GBP0.8754.
NOVEL CORONAVIRUS STATS
3,578,708 confirmed cases
251,054 reported deaths