CURRENCY PATROL LOCKDOWN – DAY41 07 HOURS 32 MINUTES
By the close of trade on Wednesday, the South African rand weakened against the US dollar.
- Both domestic and global economic indicators painted a bleak outlook for the economy amid the coronavirus crisis.
- Private sector activity in South Africa fell to a record low in April, as temporary company closures led to a collapse in demand.
- In the US, private sector jobs fell in April, as mandatory business closures in response to the novel coronavirus outbreak ravaged the economy, setting up the overall labour market for historic job losses last month. Jobs report will probably be one of the worst ever,” as the Wednesday ADP report showed that US companies lost 20.2 million jobs in April, slightly below the consensus estimate of 20.6 million payrolls erased.
The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond advanced to 3.96% while that for the longer-dated 2030 issue fell to 9.72%.
In early trade on Thursday, the US dollar is trading 0.6% lower against the South African rand at R18.6618, while the euro is trading 0.6% lower at R20.1542. The British pound has declined 0.6% against the South African rand to trade at R23.0081.
By the close of trade on Wednesday, the euro advanced against most of the major currencies.
- April data indicated by far the fastest decline in UK construction output since the survey began 23 years ago. The vast majority of survey respondents (86%) reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the public health emergency. The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index fell from 39.3 in March to 8.2 in April, to signal a rapid downturn in overall construction output.
- German services PMI rose in April but remained weaker due to lockdown measures to contain the spread of the highly contagious coronavirus.
- The seasonally adjusted German factory orders plunged on a monthly basis in March, to its lowest levels since January 1991, due to the coronavirus pandemic.
- Further, the eurozone retail sales declined on a monthly basis in March, as restrictions to stem the spread of the coronavirus were put in place and shoppers reduced their spending on everything except food and online orders.
- Separately, the European Commission forecasted that the European Union will contract 7.4% in 2020 .Europe’s ability to recover from the worst economic shock it has seen since the Great Depression is being jeopardized by the reopening of old political and legal wounds that could threaten trillions of euros in stimulus money. The European Union economy will shrink by a record 7.5% this year, the European Commission warned Wednesday, and the drop could be even more precipitous across the 19 countries that use the euro.
In early trade on Thursday, the euro has marginally advanced against the US dollar to trade at $1.0800, while it has gained 0.2% against the British pound to trade at GBP0.8762.
Below is a link to a very detailed Covid-19 picture giving stats and graphs. Well worth a look. I will add this to my daily report.