LOCKDOWN LEVEL Ver 3.2 [DAY 24]
TOTAL DAYS 130 – 07 HOURS 15 MINUTES
By the close of trade on Tuesday, the South African rand weakened against the US dollar.
- Fears over the pace of economic recovery as coronavirus cases surged worldwide.
- Hundreds of people have been wounded in a huge blast that ripped through Lebanon’s capital, Beirut, according to the country’s health minister. The massive explosion on Tuesday at Beirut’s port released a shockwave which caused widespread damage to buildings, shattering windows in different parts of the city. The cause of the blast was not immediately clear.
- In the next few months, the Federal Reserve will be solidifying a policy outline that would commit it to low rates for years as it pursues an agenda of higher inflation and a return to the full employment picture that vanished as the coronavirus pandemic hit. Recent statements from Fed officials and analysis from market veterans and economists point to a move to “average inflation” targeting in which inflation above the central bank’s usual 2% target would be tolerated and even desired.
- In the US, factory orders rose more than expected on a monthly basis in June, pointing to a steady rebound after widespread shutdowns in the early stages of the pandemic.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.55%. Further, the yield on 2023 bond advanced to 4.61% while that for the longer-dated 2030 issue rose to 9.32%.
In early trade on Wednesday, the US dollar is trading 0.3% lower against the South African rand at R17.3306, while the euro is trading 0.2% lower at R20.4829. The British pound has declined 0.2% against the South African rand to trade at R22.6824.
By the close of trade on Tuesday, the euro advanced against most of the major currencies.
- European Central Bank chief economist Philip Lane cautioned against reading too much into recent economic data and warned that a global resurgence of coronavirus cases will weigh on consumers and businesses for some time. It would be “unwise” to draw strong conclusions from the euro area’s less-bad-than-expected second-quarter performance, which should be jointly assessed with the three months through September, Lane said in a blog post published on the ECB’s website.
- The eurozone producer price index (PPI) rose slightly more than expected on a monthly basis in June, driven by an increase in energy prices.
- Bank of England officials could signal on Thursday that the case for more monetary stimulus is growing as a nascent rebound from the pandemic-induced recession risks fading.
In early trade on Wednesday, the euro has advanced 0.1% against the US dollar to trade at $1.1818, while it has marginally gained against the British pound to trade at GBP0.9030.
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