LOCKDOWN LEVEL Ver 3.2 [DAY 23]
TOTAL DAYS 129 – 08 HOURS 15 MINUTES
By the close of trade on Monday, the South African rand weakened against the US dollar.
- Concerns about the economic fallout from rising COVID-19 cases dented investors’ appetite for riskier assets. Following a two-week freefall, the US dollar index has experienced a rebound of some sorts, following a slight recovery in the US Dollar across several major currencies. This recovery comes despite data showing that the coronavirus infection rates in the US states continue to climb. On Monday the Florida Department of Health declared an increase in the number of confirmed coronavirus cases in the state by 4752.
- The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, U.S. central bankers said on Monday. The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.
- In the US, ISM manufacturing PMI accelerated to its highest level in nearly 1-1/2 years in July as orders increased despite a resurgence in new COVID-19 infections, which is raising fears about the sustainability of a budding economic recovery.
- Markit manufacturing PMI fell in July.
- The Dallas Fed President, Robert Kaplan stated that the economic rebound this quarter is more muted than expected and, as a result, the unemployment rate this year will likely be higher than previously thought.
- The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.49%. Further, the yield on 2023 bond declined to 4.60% while that for the longer-dated 2030 issue rose to 9.26%.
In early trade on Tuesday, the US dollar is trading marginally higher against the South African rand at R17.1975, while the euro is trading 0.1% higher at R20.2477. The British pound has gained 0.1% against the South African rand to trade at R22.5071.
By the close of trade on Monday, the euro declined against most of the major currencies.
- Spain’s former king Juan Carlos is to leave the country and go into exile abroad following a series of damaging allegations about his financial arrangements that have harmed the reputation of the monarchy and embarrassed his son, King Felipe. In March Felipe stripped Juan Carlos of his annual stipend and renounced his own personal inheritance from his father after reports that he was in line to receive millions of euros from a secret offshore fund with ties to Saudi Arabia.
- Eurozone manufacturing activity expanded modestly in July, its first growth since early 2019, adding to hopes the sector is emerging from the hit of the coronavirus pandemic.
- German manufacturing PMI rose for the first time since December 2018, signalling that a recovery in the sector remains on track.
In early trade on Tuesday, the euro has advanced 0.1% against the US dollar to trade at $1.1773, while it has marginally gained against the British pound to trade at GBP0.8996.
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