LOCKDOWN LEVEL 1 [DAY 13]
TOTAL DAYS 193 – 07 HOURS 30 MINUTES
By the close of trade on Monday, the South African rand weakened against the US dollar.
- Trump tweeted saying “he will leave Walter Reed Medical Center at 6:30 p.m. ET, says he’s feeling really good” and don’t be afraid of Covid”. Trump did eventually leave the Walter Reed facility and this buoyed the US Dollar.
- The recent surge in the U.S. dollar will last less than three months, according to a majority of foreign exchange strategists polled by Reuters who said the greenback would have a roller coaster ride in the run-up to the U.S. presidential election.
- On the data front, conditions in the South African private sector improved in September to the best levels in almost a year, as lockdown restrictions eased.
- In the US, the ISM non-manufacturing PMI advanced in August.
- Meanwhile, the Federal Reserve (Fed) of Chicago President, Charles Evans stated that US inflation could temporarily shoot above 2.0% target next spring, testing the central bank’s new inflation framework.
- The yield on benchmark government bonds mostly advanced yesterday. The yield on 2026 bond rose to 7.21%. Further, the yield on 2023 bond declined to 4.51%, while that for the longer-dated 2030 issue climbed to 9.47%.
In early trade on Tuesday, the US dollar is trading 0.3% lower against the South African rand at R16.5422, while the euro is trading 0.2% lower at R19.5022. The British pound has declined 0.2% against the South African rand to trade at R21.4744.
By the close of trade on Monday, the euro advanced against most of the major currencies.
- New actions to contain the virus are being taken in the US and Europe, but investors are looking past it and taking equities and risk assets, in general, higher to start the new week. MSCI Asia Pacific recouped most of last week’s 0.7% loss with gains of move than 1% in Japan, Hong Kong, South Korea, and Australia. Coming fiscal support helped lift the Australian market by more than 2.5%. Europe’s Dow Jones Stoxx 600 is up for a third consecutive session and is nearing the 200-day moving average that has checked the benchmark over the last three months. US shares are trading with a clear upside bias.
- New UK car registrations fell 4.4% in September from a year earlier, according to the motor industry. That made it the worst September this century in what is normally the industry’s second most important month. There were just 328,041 new registrations in the month, said the Society of Motor Manufacturers and Traders (SMMT). The car sector has been hit hard by the coronavirus pandemic, which closed factories and showrooms.
- The eurozone’s retail sales came in stronger-than-expected for August, buoyed by a sharp surge in online purchases and increased clothing sales amid the COVID-19 pandemic.
- Further, investor confidence in the eurozone came in better-than-expected in October.
- Germany’s service sector barely grew in September. However, robust manufacturing activity helped the private sector in the eurozone’s largest economy to remain on track for a solid recovery in 3Q20.
In early trade on Tuesday, the euro has advanced 0.1% against the US dollar to trade at $1.1789, while it has marginally gained against the British pound to trade at GBP0.9079.
In other news, Antivirus software pioneer John McAfee was indicted by the U.S. Justice Department on Monday for tax evasion and failing to file tax returns, capping years of outrageous and erratic behavior from the tech entrepreneur. The indictment alleges McAfee earned millions from promoting cryptocurrencies, consulting work, speaking engagements and selling the rights to his life story for a documentary, but did not file tax returns from 2014 to 2018. Authorities also allege McAfee concealed assets from the IRS, including real estate, a yacht, a car and cryptocurrency.