By the close of trade on Wednesday, the South African rand strengthened against the US dollar.

Investors watching the COVID-19 vaccine development process could be forgiven for thinking it’s not so hard. The effort has moved extraordinarily quickly so far, and with few hiccups. That isn’t how things usually go, especially for new diseases. The world got a reminder Tuesday as AstraZeneca Plc paused the trial of its leading candidate, developed with Oxford University, to investigate a single volunteer’s illness.  Phase 3 of the clinical trial was halted.

  • A survey showed that South Africa’s business confidence recovered from an all-time low in 3Q20, as coronavirus-led curbs were largely lifted, but consumer sentiment remained heavily depressed.
  • In the US, data showed that employers posted more job openings in July, but hired fewer workers than in June, as early-summer optimism about reopening businesses faded.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond declined to 7.18%. Further, the yield on 2023 bond dropped to 4.40%, while that for the longer-dated 2030 issue rose to 9.26%.

In early trade on Thursday, the US dollar is trading 0.3% higher against the South African rand at R16.6653, while the euro is trading 0.5% higher at R19.7039.  The British pound has gained 0.3% against the South African rand to trade at R21.6635.

By the close of trade on Wednesday, the euro advanced against most of the major currencies.

  • The European Central Bank is all but certain to keep policy unchanged on Thursday but with the economic recovery losing momentum and a strong euro dampening already-anaemic inflation expectations, it may set the stage for more stimulus later. Having pulled out the stops this spring to halt a historic economic decline across the 19-country currency bloc, the ECB has time to let governments implement their own countermeasures and for its own ultra-easy policy to seep into the real economy. But hurdles to the rebound from a 12% output drop in the second quarter are proving bigger than expected.
  • Britain’s internal battle over Brexit has reached a new low. Ahead of a crucial round of talks between London and Brussels over the future trading relationship between the UK and the European Union, the British government made a startling admission: That it would be prepared to break the terms of an international treaty.
  • Stamp duty cuts, coupled with increased demand for homes with gardens since the pandemic, has driven confidence in the housing market to a four-year high, according to surveyors and estate agents. A net balance of 44% of members of the Royal Institute of Chartered Surveyors (Rics) reported an increase in prices, the strongest reading since 2016, according to its latest monthly snapshot. This compares with 13% in July and marks a dramatic turnaround from the -33% registered in May. Virtually all parts of the UK are now seeing prices increase.
  • The decision by Premier Dan Andrews to extend stage-four restrictions in Melbourne, Australia’s second largest city, could hamper the nation’s nascent economic recover and limit the potential upside for the local currency. Andrews’ proposed “reopening roadmap” implies that Victoria, Australia’s second most populous state, would only completely emerge from coronavirus-enforced restrictions on November 23, if the region is able to record no new infections “for the two weeks prior”.

In early trade on Thursday, the euro has advanced 0.2% against the US dollar to trade at $1.1823, while it has gained 0.2% against the British pound to trade at GBP0.9098.