LOCKDOWN LEVEL Ver 3.2 [DAY 17]
TOTAL DAYS 124 – 07 HOURS 20 MINUTES
By the close of trade on Tuesday, the South African rand weakened against the US dollar.
- Meanwhile, the International Monetary Fund has approved a $4.3bn loan for South Africa for COVID-19 relief, at a low rate of interest.
- The greenback gained ground, firming over prospects of another huge economic stimulus package in the US. The US economy is emerging from what experts think will be its worst quarter on record. Although that’s behind us now and conditions have improved since the country ground to a halt in April, the recovery remains fragile and could ultimately disappoint hopeful economists. The Bureau of Economic Analysis will report just how bad the second quarter was on Thursday, in its first estimate of gross domestic product, the broadest measure of the economy.
- Consumer confidence fell more than expected in July, amid a flare-up in COVID-19 infections across the US.
- The S&P CoreLogic Case-Shiller home price index rose less-than-expected on an annual basis in May, due to the brief but sharp slowdown in home sales, as the coronavirus pandemic affects the nation.
- The Fed announced that its Board of Governors had decided to extend until the end of the year several emergency loan programs that had been set to expire on 30 September. The Federal Reserve isn’t ready to pull the trigger on any major policy changes, at least not yet. Further, members of the US Congress disagreed over a $1.00tn aid proposal from the Senate Republicans.
- The yield on benchmark government bonds mostly advanced yesterday. The yield on 2026 bond rose to 7.48%. Further, the yield on 2023 bond declined to 4.89% while that for the longer-dated 2030 issue climbed to 9.18%.
In early trade on Wednesday, the US dollar is trading 0.3% lower against the South African rand at R16.4777, while the euro is trading 0.2% lower at R19.3291. The British pound has declined 0.3% against the South African rand to trade at R21.2952.
By the close of trade on Tuesday, the euro declined against most of the major currencies.
- In the UK, Prime Minister, Boris Johnson, warned that businesses in the country should prepare for a second coronavirus wave.
- Shop prices fell again in July as high street stores continue to look to tempt people back through their doors, according to new figures. The latest BRC-Nielsen shop price index revealed that shop prices slid 1.3% in July, as non-food products dropped in value. However, this represented a slowdown in deflation from June, when prices fell by 1.6%.
- Fitch Ratings has revised its Outlook on Japan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and has affirmed the rating at ‘A’. Key rating Drivers, The revision of the Outlook to Negative on Japan’s Long-Term IDRs reflects the following key rating drivers: The coronavirus pandemic has caused a sharp economic contraction in Japan, despite the country’s early success in containing the virus. A downturn in consumer spending and business investment has been exacerbated by a steep decline in exports associated with weak external demand.
In early trade on Wednesday, the euro has advanced 0.1% against the US dollar to trade at $1.1729, while it has gained 0.2% against the British pound to trade at GBP0.9075.
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