Election counting well under way across the United States of America.  There’s no predicting the outcome but expect volatility in the market.  Due to the much higher mail in ballots and early votes cast this election result may only be announced on Tuesday 3rd November 2020.   A delayed announcement will only add to the uncertainty and the volatility.

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

  • Global markets rallied on hopes that the Democrats will score a clean sweep in the US elections.
  • In the US, factory orders advanced in September. However, further gains could be limited, amid an anticipated slowdown in consumer spending, as government money for businesses and workers impacted by the COVID-19 pandemic runs out.
  • On the US Presidential election front, opinion polls have been leaning towards a victory by former Vice President, Joe Biden over the incumbent Donald Trump.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond dipped to 7.06%. Further, the yield on 2023 bond advanced to 4.25%, while that for the longer-dated 2030 issue dropped to 9.29%.

In early trade on Wednesday, the US dollar is trading higher against the South African rand at R16.2600, while the euro is trading higher at R18.9422.  The British pound has gained against the South African rand to trade at R21.1392.

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

  • Bank of Japan Governor Haruhiko Kuroda said on Wednesday it was desirable for currency rates to move stably reflecting economic fundamentals. “Global market developments remain jittery reflecting uncertainty over the outlook stated the Governor.
  • Meanwhile, the European Economy Commissioner, Paolo Gentiloni, stated that the eurozone Finance ministers are confident that an agreement will be reached between the Council of the European Union (EU) and the European Parliament on the next seven-year EU budget soon.

In early trade on Wednesday, the euro slipped against the US dollar to trade at $1.1722, while it has weakened against the British pound to trade at GBP0.8926.

At the time of writing the pollsters had declared Biden a winner in Arizona, which has sparked outrage from the Trump camp.  Biden immediately took to the stage ahead of any Trump counter but you can be sure a legal challenge is to be mounted later on Wednesday!