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

  • U.S. White House Chief of Staff Mark Meadows says a stimulus deal is near.  In a separate interview, House Speaker Nancy Pelosi also said there are hopes for a deal.  The rand which had performed admirably [best in the basket of EM currencies] took a turn for the worse as Trump stated the democrats were unwilling to compromise.
  • In the US, the Federal Reserve’s (Fed) Beige Book report for early October showed that most regions of the US continued to show slight to modest growth in economic activity.
  • Fed Governor, Lael Brainard, called for more fiscal support from the Congress, stating that more stimulus is needed to address a recovery that has left out large parts of the economy.
  • Oil prices tumbled after the U.S. Energy Information Administration reported increased gasoline inventories last week, which indicated weak demand for fuel. U.S. WTI crude futures (December) fell $1.71 (-4.1%) to $39.99 a barrel.
  • Covid-19 weighs heavily as our new infection rate rises over 2000 per day.   Europe is experiencing a second wave of new infections running into the start of Winter.
  • It’s the final push to the US General Elections. Investors now turn their attention to the final Presidential debate between Trump and Biden this evening (where non-speakers microphones will be muted to stop interruptions) and to weekly jobless claims where the loss is expected to come in at 860k.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond dropped to 7.02%. Further, the yield on 2023 bond advanced to 4.32%, while that for the longer-dated 2030 issue declined to 9.27%.

In early trade on Thursday, the US dollar is trading higher against the South African rand at R16.3676, while the euro is trading higher at R19.4046.  The British pound has gained against the South African rand to trade at R21.5086.

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

  • The European Central Bank President, Christine Lagarde, warned that the unexpectedly early pickup in coronavirus infections is a “clear risk” to the economic outlook.
  • U.K. and European Union negotiators are to resume trade talks with an aim to reach a deal by mid-November. U.K. official data showed that consumer prices increased 0.5% on year in September (+0.6% expected).

In early trade on Thursday, the euro has slipped against the US dollar to trade at $1.1842, while it has marginally weakened against the British pound to trade at GBP0.9022