LOCKDOWN PHASE 4 DAY 47 07 HOURS 47 MINUTES
By the close of trade on Tuesday, the South African rand weakened against the US dollar.
- In South Africa questions abound around Cyril Ramaphosa. The President has not addressed the Nation in over a fortnight. The National Command Council closed group continues to drive the countries course with little to no knowledge of where to next and when?
- Meanwhile, in the US, consumer price index (CPI) for April dropped by the most since the Great Recession, weighed down by a plunge in demand for gasoline and services including airline travel as Americans stayed home during the coronavirus crisis.
- The Federal Reserve (Fed) Bank of New York began buying corporate-bond, exchange-traded funds, marking a historic expansion of the central bank’s efforts to support the economy and financial system during the most significant financial crisis in nearly a century sparked by the COVID-19 pandemic.
- A recession from the novel coronavirus outbreak is a near certainty, economists say. And the fallout has already begun to wipe out a substantial number of American jobs. According to the latest employment report from the US Bureau of Labor Statistics, the US lost 20.5 million jobs in April, a historical record and vastly larger than the loss of 870,000 nonfarm payroll jobs in March.
The dollar fell on Tuesday as the mood turned cautious a day ahead of Federal Reserve Chairman Jerome Powell’s speech on economic issues and as investors weighed the chances of negative U.S. interest rates.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.75%. Further, the yield on 2023 bond declined to 5.22% while that for the longer-dated 2030 issue fell to 9.31%.
In early trade on Wednesday, the US dollar is trading 0.2% lower against the South African rand at R18.3936, while the euro is trading 0.2% lower at R19.9592. The British pound has declined 0.2% against the South African rand to trade at R22.5766.
Yesterday, the euro advanced against most of the major currencies.
The International Monetary Fund’s Managing Director, Kristalina Georgieva stated that it was “very likely” the Fund would cut global growth forecasts further, as the pandemic was hitting many economies harder than previously projected.
UK inflation could dip below zero at the end of this year and into early 2021, Bank of England Deputy Governor Ben Broadbent said on Tuesday, although he added that he did not expect entrenched deflation. In a business briefing, Broadbent also said that, at first glance, the changes to the Job Retention Scheme unveiled Tuesday by Treasury head Rishi Sunak were broadly in line with the assumptions made in the economic scenario published by the Bank last week.
OPEC and its allies want to maintain existing oil cuts beyond June when the OPEC+ group is next due to meet to shore up prices and demand, which has been hit by the coronavirus pandemic, sources said on Tuesday. Global oil demand has slumped by about 30% as the crisis has curtailed travel and economic activity, building up oil inventories globally.
In early trade on Wednesday, the euro has marginally advanced against the US dollar to trade at $1.0851, while it has weakened 0.1% against the British pound to trade at GBP0.8841.
Below is a link to a very detailed Covid-19 picture giving stats and graphs. Well worth a look.