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

  • Many market participants feared volatility around the first the presidential debate due to the risk of a Biden meltdown, but such fears were unfounded.  Some key notes on the debate held early morning SA time :
    • Biden performed much better than feared (by some)
    • All debate on whether Biden is mentally healthy should end after tonight’s debate, but probably wont.
    • Trump probably gains the most from 1-to-1 debates against Biden as Trump bullied his way through the debate.
    • Markets remained calm throughout the debate
  • South Africa’s unemployment rate fell in 2Q20.
  • In the US, the Dallas Fed President, Rob Kaplan, indicated that the US economy won’t be back on track until late 2022 or sometime in 2023. Meanwhile, New York Fed President, John Williams, stated that he doesn’t see any sign of high inflation.
  • On the data front, US consumer confidence rebounded by the most in 17 years in September, amid an improvement in labour market views. Trade deficit in goods widened in August, with imports surging, as businesses rebuild inventories which were depleted early in the pandemic.
  • China’s manufacturing economy retained strong growth momentum in September, with firms signaling further marked increases in production and new work. Notably, new business expanded at the strongest rate since January 2011, aided by a solid rebound in export sales. Increased activity at home and abroad was reportedly driven by the easing of lockdown measures as the sector continued to recover from the coronavirus disease 2019 (COVID-19) pandemic. Furthermore, employment stabilized in September, which ended an eight-month period of job shedding.
  • The yield on benchmark government bonds dropped yesterday. The yield on 2026 bond fell to 7.23%. Further, the yield on 2023 bond declined to 4.55%, while that for the longer-dated 2030 issue dropped to 9.45%.

In early trade on Wednesday, the US dollar is trading 0.1% higher against the South African rand at R16.9520, while the euro is trading 0.1% higher at R19.9033. At 06:00 The British pound has marginally declined against the South African rand to trade at R21.7820.

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

  • Regeneron Pharmaceuticals Inc on Tuesday said its experimental two-antibody cocktail reduced viral levels and improved symptoms in non-hospitalized patients with mild-to-moderate COVID-19, the disease caused by the novel coronavirus. When asked whether the company would apply for emergency use authorization from the U.S. Food and Drug Administration, the company said it plans to “rapidly” discuss the early trial results with regulatory agencies, including the U.S. Food and Drug Administration.
  • The eurozone’s economic sentiment index improved more-than-expected in September, mainly due to a rise in optimism in the services sector, despite concerns about a second wave of the COVID-19 pandemic. It wasn’t so long ago when everything was looking up for the Eurozone economy and the single currency couldn’t put a step wrong. After being ravaged in the spring by soaring deaths from COVID-19 and an economically bruising lockdown, Europe had started to get its house in order by late May. Virus cases were coming down, businesses were allowed to reopen, and European leaders demonstrated a rare show of unity when they agreed on a historic virus relief fund. But as infections begin to rise again and firms struggle to make ends meet with new restrictions, the euro could be headed for stormier waters
  • On the contrary, German consumer price index (CPI) further slowed on a monthly basis in September, due to lower energy costs and a VAT cut as part of the government’s stimulus push to help Europe’s largest economy recover from the coronavirus shock.

In early trade on Wednesday, the euro has marginally slipped against the US dollar to trade at $1.1739, while it has gained 0.1% against the British pound to trade at GBP0.9136.