Cracker of a day along the East Coast this morning.  The surfers tell me that the waves are the best they’ve had in years!

By the close of trade on Monday, the South African rand weakened against the US dollar.

  • The South African Reserve Bank is expected to leave its interest rates unchanged later this week.
  • In the US, the National Association of Home Builders housing index declined in November but remained near the highest level for FY19.
  • On the trade front, the US granted a new 90-day extension allowing the local companies to continue doing business with Chinese company, Huawei Technologies.    Reports are that the “mood is pessimistic regarding US-China trade deal being passed. China is troubled after US President Trump said no tariff rollback- Strategy is to be discussed. Day after day, haven’t we had President Trump, Director of the National Economic Council Larry Kudlow and United States Trade Representative Robert Lighthizer marching out and telling us that China wants a deal very badly and that Phase One is very close to being done?
  • Fannie Mae upgraded its FY20 economic forecast to 1.9%, indicating that consumer spending will be boosted by the signing of the trade deal between US and China.
  • The yield on benchmark government bonds rose yesterday. The yield on 2020 bond advanced to 6.88% while that for the longer-dated 2026 issue rose to 8.40%.

In early trade on Tuesday, the US dollar is trading 0.1% higher against the South African rand at R14.8328, while the euro is trading 0.2% higher at R16.4270.  The British pound has gained 0.1% against the South African rand to trade at R19.2126.

On Monday, the euro advanced against most of the major currencies.

  • The European Central Bank (ECB) Vice President, Luis de Guindos, stated that the recent softening of the macroeconomic growth outlook and the associated low-for-longer interest rate environment are likely to weigh further on the bank’s profitability prospects.

In early trade on Tuesday, the euro has marginally advanced against the US dollar to trade at $1.1075, while it has marginally gained against the British pound to trade at GBP0.8550.