LOCKDOWN LEVEL 1 [DAY 1]
TOTAL DAYS 181 – 07 HOURS 40 MINUTES
By the close of trade on Monday, the South African rand weakened against the US dollar. In the US the death of Ruth Bader Ginsburg shone the spotlight on who would be nominated.
- The greenback gained ground amid surging coronavirus cases and following doubts over the next round of US fiscal support.
- The Fed Chair, Jerome Powell, stated that the US economy is improving but has a long way to go before fully recovering from the coronavirus pandemic and stated that the Fed remains committed to using all the tools at its disposal to help the US economy recover from the blow delivered by the coronavirus pandemic.
- Many arguing against aggressive stimulus spending from the federal government cite one critical reason: the national debt. Now totaling over $26.7 trillion, the U.S. debt-to-GDP ratio is one of the highest in the world.
- On the data front, the Chicago Fed national activity index fell in August.
- Thousands of leaked documents shared with journalists have shown how some of the world’s biggest banks for years facilitated the movement of dirty money. The documents, part of a collection of files belonging to the Financial Crimes Enforcement Network, were published on Sunday by BuzzFeed News and the International Consortium of Investigative Journalists. FinCEN is in charge of compiling “suspicious-activity reports” sent to it by banks that suspect financial wrongdoing by their clients. SARs do not constitute evidence of wrongdoing but are a way to alert regulators and law enforcement. Of the $2 trillion in suspicious transactions, $1.2 trillion moved through Deutsche Bank. Nearly all the rest was processed by JPMorgan, Standard Chartered, Bank of New York Mellon, and Barclays. Several other banks, including Société Générale, HSBC, State Street Corporation, Commerzbank AG, and China Investment Corporation, also processed billions.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond advanced to 7.26%. Further, the yield on 2023 bond rose to 4.59%, while that for the longer-dated 2030 issue climbed to 9.30%.
In early trade on Tuesday, the US dollar is trading 0.2% higher against the South African rand at R16.8122, while the euro is trading 0.1% higher at R19.7744. The British pound has gained 0.2% against the South African rand to trade at R21.5436.
By the close of trade on Monday, the euro advanced against most of the major currencies.
- In Italy, the referendum question submitted to voters asked them whether they wanted to confirm the constitutional laws proposing the reduction of the total number of Italian MPs to 600 (from 945), which had already been passed by votes in both branches of the Italian parliament. Opinion polls published before the 15-day blackout period preceding the vote had anticipated the victory of the Yes vote (confirming the reduction) with a range of 65% to 70% of votes in favour.
- The German Bundesbank report showed that the nation’s economic rebound may lose some more steam heading into the end of the year, as new orders slow and the services sector remains constrained by pandemic-containment measures.
- Further, the European Central Bank (ECB) President, Christine Lagarde, stated that Europe’s economic rebound is uncertain and uneven, requiring very careful assessment of incoming data, including the evolution of the coronavirus pandemic.
In early trade on Tuesday, the euro has slipped 0.1% against the US dollar to trade at $1.1762, while it has weakened 0.1% against the British pound to trade at GBP0.9180.