LOCKDOWN LEVEL Ver 3.2 [DAY 10]
TOTAL DAYS 117 – 07 HOURS 40 MINUTES
By the close of trade on Tuesday, the South African rand strengthened against the US dollar.
- Investor risk appetite was boosted by the outcome of the EU leaders’ summit and positive COVID-19 vaccine news.
- In the US, the Chicago Fed National activity index advanced in June, marking a record high going back to 2000 and indicating that some aspects of the economy are attempting to come off its coronavirus lows.
- Meanwhile, Joe Biden, the presumptive Democratic presidential nominee, unveiled a $775.00bn plan to revive the economy during the pandemic, with a promise to bring 3 million new jobs to workers, while also helping fortify universal child and elder care in the US.
- The U.S. Senate Banking Subcommittee on Economic Policy is set to hold a hearing tomorrow at 9:30am called ‘US-China: Winning the Economic Competition.’ Among a group of witnesses set to testify on how the United States can succeed at remaining economically dominant over China is J. Christopher Giancarlo, Senior Counsel at Willkie, Farr, and Gallagher and former Chairman of the CFTC.
- The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.44%. Further, the yield on 2023 bond advanced to 4.79%, while that for the longer-dated 2030 issue fell to 9.30%.
In early trade on Wednesday, the US dollar is trading 0.2% lower against the South African rand at R16.3852, while the euro is trading marginally higher at R18.9189. The British pound has declined 0.2% against the South African rand to trade at R20.8601.
By the close of trade on Tuesday, the euro advanced against most of the major currencies.
- EU leaders struck an agreement on a massive stimulus plan to revive their coronavirus-battered economies. The heads of state of the 27 EU member states met in Brussels to discuss the revamped EUR 1074bn multi-annual financial framework (MFF) and the EUR 750bn ‘Next Generation EU’ stimulus package. The revamped MFF and the recovery package, aimed at mitigating the economic damage of the COVID-19 crisis, spurred the debate on European solidarity in the past months. European Council chairman Charles Michel has met with each prime minster and president bilaterally in an effort to get everyone on board.
- The United States and Britain put on a show of unity against Chinese telecoms giant Huawei on Tuesday, as Secretary of State Mike Pompeo delivered stinging criticism of Beijing’s handling of the coronavirus pandemic and urged like-minded nations to “push back” together against China’s threatening behavior. Pompeo, who is visiting Britain, praised the U.K.’s response to challenges raised by China as tensions continue to grow between Western powers and Beijing.
In early trade on Wednesday, the euro has advanced 0.2% against the US dollar to trade at $1.1546, while it has gained 0.2% against the British pound to trade at GBP0.9071.
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