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

  • In the US, on the third day of congressional testimony, the Fed Chairman, Jerome Powell reiterated that a fiscal package will be needed to keep the US economy’s recent gains from sliding backward.
  • House Democrats are preparing a new, smaller coronavirus relief package expected to cost about $2.4 trillion as they try to forge ahead with talks with the Trump administration, a source familiar with the plans said Thursday. The bill would include enhanced unemployment insurance, direct payments to Americans, Paycheck Protection Program small-business loan funding and aid to airlines, among other provisions.
  • On the data front, the number of people filing new claims for unemployment benefits unexpectedly increased for the week ended 18 September, supporting views that the economic recovery from the COVID-19 pandemic was running out of steam amid diminishing government funding.
  • Exceptional demand for new and existing homes, brought on by the stay-at-home culture of the coronavirus pandemic, has the housing market severely depleted. Sales of newly built homes jumped to the highest level in 14 years in August, but builders’ supply dropped to just 3.3 months’ worth at the current sales pace. A six-month supply is considered a balanced market. Supply was at 5.5 months in August 2019, according to the U.S. Census.
  • The yield on benchmark government bonds mostly rose on Wednesday. The yield on 2026 bond advanced to 7.27%. Further, the yield on 2023 bond declined to 4.56%, while that for the longer-dated 2030 issue climbed to 9.47%

In early trade on Friday, the US dollar is trading marginally lower against the South African rand at R16.9233, while the euro is trading 0.1% lower at R19.7466.  The British pound has marginally declined against the South African rand to trade at R21.5265.

By the close of trade on Thursday, the euro declined against most of the major currencies.

  • According to a Teikoku Databank survey, 500 companies have declared bankruptcy in Japan due to the impact of the COVID-19 pandemic, as of September 8. The number has ballooned in the fewer than 200 days since the first COVID-19-related bankruptcy, a Hokkaidō-based food manufacturer, on February 26. The combined liabilities of the bankruptcies amounted to almost ¥254 billion (for 498 of the companies, with 2 still under investigation). Three were businesses valued at over ¥10 billion (amounting to 0.6% of the above total), while another 411 were valued at less than ¥500 million each (82.5% of the total).
  • German business morale improved for the fifth month in a row in September, in a further sign that Europe’s largest economy is enjoying a solid recovery from the coronavirus shock suffered in the first half of the year.

In early trade on Friday, the euro has marginally slipped against the US dollar to trade at $1.1667, while it has weakened 0.1% against the British pound to trade at GBP0.9147.