LOCKDOWN LEVEL 2 [DAY 31] T-16 hours to Level 1
TOTAL DAYS 180 – 07 HOURS 40 MINUTES
By the close of trade on Friday, the South African rand weakened against the US dollar.
- The dollar clung to late-week gains on Monday, while the yen and yuan each edged higher, as investors looked ahead to a slew of U.S. Federal Reserve speakers this week and to a decision on the inclusion of Chinese government bonds in a global index. Chinese bond buying by foreigners has helped drive the Yuan up more than 1% this month and it crept back toward a 16-month peak hit last week in early offshore trade, rising 0.2% to 6.7648 per dollar
- In the US, the Michigan consumer sentiment index advanced more-than-expected in September.
- In contrast, the US current-account deficit sharply widened in 2Q20.
- Meanwhile, Congressional lawmakers planned to introduce a bill that would see the US government funded through mid-December but House Speaker, Nancy Pelosi, highlighted that the airlines and restaurant industries both need help.
- The yield on benchmark government bonds mostly rose on Friday. The yield on 2026 bond remained steady at 7.16%. Further, the yield on 2023 bond advanced to 4.55%, while that for the longer-dated 2030 issue rose to 9.17%.
In early trade on Monday, the US dollar is trading 0.3% lower against the South African rand at R16.2833, while the euro is trading 0.1% lower at R19.3080. The British pound has marginally declined against the South African rand to trade at R21.0841.
On Friday, the euro advanced against most of the major currencies. On the data front, German producer price index (PPI) fell less-than-expected on an annual basis in August.
- Britain is at a “critical point” in the coronavirus pandemic, Prime Minister Boris Johnson will be told on Monday, as concern mounts that a second lockdown may be needed to stop the renewed spread of the disease. Chief Medical Officer Chris Whitty plans to sound the alert, saying U.K. data are heading in the “wrong direction,” according to a preview of remarks prepared for a public briefing. The warning comes amid expectations that local restrictions could soon be extended to London. Mayor Sadiq Khan will recommend tightened rules for the capital on Monday
- More than a dozen central banks will this week confront a new reality where monetary policy in the world’s biggest economy is set to stay ultra-loose for the foreseeable future. With the Federal Reserve’s recent signal that U.S. interest rates should be kept low for at least three years, officials meeting from Sweden to New Zealand have one more assumption on which to base their decision-making, beyond the knowledge that the coronavirus remains untamed. That guidance from the Fed incorporates a reimagined policy framework to allow inflation to overshoot after periods of underperformance
- Italians began voting on Sunday in a raft of local ballots and a referendum, with the ruling coalition under pressure in its first electoral test since the coronavirus crisis. Voters have largely approved of Prime Minister Giuseppe Conte’s handling of the pandemic, but recent opinion polls suggest this will not help his coalition allies in the vote for the heads of seven regions and mayors in almost 1,000 towns. The rightist opposition, led by Matteo Salvini’s League, is expected to win at least four of the regions up for grabs, and could capture the traditional leftwing stronghold of Tuscany.
By the close of trade on Friday, the euro has advanced 0.1% against the US dollar to trade at $1.1866, while it has weakened 0.1% against the British pound to trade at GBP0.9162.
- Madrid braces for lockdown. UK Health Secretary warns action coming. US outbreak slows to 41k new cases. California, New York cases accelerate. Germany sees cases decline. Belgium cases top 100k. Russia tops 6k again. After a series of days where the US added just under 50k new cases, the pace of the outbreak cooled notable on Saturday, with the US adding just 41,206 cases, a 0.6% rise, which is in line with the 7-day average. Another 693 people died, bringing the total to 199,258, just under 200,000. Beneath the top-line data, however, the situation was markedly different: New York saw cases climb to the highest .
ZAR/USD 16.25 (-0.00)
ZAR/GBP 21.09 (-0.15)
ZAR/EUR 19.32 (-0.15)
ZAR/AUD 11.91 (-0.32)
ZAR/JPY 0.16 (-0.19)