LOCKDOWN LEVEL Ver 3.2 [DAY 31]
[Announcement due in next 4 days]
TOTAL DAYS 139 – 07 HOURS 35 MINUTES
By the close of trade on Wednesday, the South African rand strengthened against the US dollar. News out of Russia, Putin stated that one of his daughters had tested a Russian COVID-19 vaccine on herself and that she is feeling well. The Russian leader noted that the first Russian COVID-19 vaccine forms stable cell and antibody immunity.
- Investors awaited the decision on the US stimulus package. US Treasury Secretary Mnuchin has stated that Pres. Trump would like to do capital gain tax cut. Mnuchin went further on to say he could not comment on whether there would be further compromise on Covid-19 relief aid bills.
- On the data front, South African business confidence index recovered from a 35-year low in July as global economic activity improved. In contrast, the country’s retail sales dropped more-than-expected on an annual basis in June.
- The US, consumer price index (CPI) rose more-than-expected on a monthly basis in July, with a measure of underlying inflation increasing by the most in 29 and a 1/2 years, amid broad based gains in the costs of goods and services. The report from the Labor Department on Wednesday, however, probably does not mark the start of worrisome inflation, and the Federal Reserve is likely to continue pumping money into the economy to aid the recovery from the COVID-19 recession.
- The U.S. budget deficit narrowed sharply in July as virus relief wound down and receipts more than doubled, reflecting the delay in the federal tax payment deadline from April. The nation’s budget gap shrank to $63 billion during the month from $119.7 billion in July 2019, Treasury Department figures showed on Wednesday.
- The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond dropped to 7.38%. Further, the yield on 2023 bond declined to 4.41%, while that for the longer-dated 2030 issue rose to 9.27%.
In early trade on Thursday, the US dollar is trading marginally higher against the South African rand at R17.4704, while the euro is trading 0.2% higher at R20.6356. The British pound has gained 0.2% against the South African rand to trade at R22.8226.
By the close of trade on Wednesday, the euro advanced against most of the major currencies.
- Britain said its latest round of trade talks with the United States made positive progress in many areas, and that both sides agreed negotiations should continue at pace in the coming months. After leaving the European Union earlier this year Britain is trying to tie up swift trade deals with major partners like the United States to capitalize on its new freedom to strike bilateral deals rather than EU-wide ones.
- In the eurozone, the seasonally adjusted industrial production dipped on a monthly basis in June.
- In the UK, GDP shrank by a record in 2Q20, when the coronavirus lockdown was the tightest, experiencing the most severe contraction reported by any major economy so far. UK house prices gained momentum last month, moving out of negative territory for the first time since lockdown began as the government’s stamp duty holiday motivated buyers. However the bounce is not expected to last long, as government support schemes wind down in the winter. UK house prices firm up Across the UK in aggregate, a net balance of 12 per cent of respondents to the Royal Institution of Chartered Surveyors’ monthly survey reported an increase in house prices during July.
- This week Australian Treasurer Josh Frydenberg acknowledged that real unemployment that is, Australians without jobs is actually much higher at 13.3%. Using this figure, there would be more than 1.6 million Australians and counting actually out of work at the moment, at the same times the job market continues to shrink.
In early trade on Thursday, the euro advanced 0.2% against the US dollar to trade at $1.1812, while it has marginally gained against the British pound to trade at GBP0.9042.
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