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

  • Optimism around a potential COVID-19 vaccine waned. Some of the world’s top central bankers have warned the global economy will still need support this year and next to weather the coronavirus crisis even if a successful vaccine is found. In remarks that contrast with the euphoria in financial markets since Pfizer Inc. and BioNTech SE announced “extraordinary” results for their experimental vaccine, policy makers said the near-term outlook will remain dominated by rising infections and new lockdowns. “While the latest news on a vaccine looks encouraging, we could still face recurring cycles of accelerating viral spread and tightening restrictions
  • U.S. stock investors have expressed concerns that President Donald Trump’s effort to contest the U.S. election without evidence could roil markets temporarily, but few appeared seriously worried that challenges to the results will succeed. Ahead of the election, analysts had said a key risk to financial market stability was the possibility that Trump would contest the result if he lost, or refuse to leave office. Still, even as that scenario has been playing out, the benchmark S&P 500 stock index is up approximately 6% since Election Day.
  • South African President, Cyril Ramaphosa extended the National State of Disaster by a month and urged South Africans to continue to adhere to health regulations in order to avoid a second wave of infections.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond dropped to 6.93%. Further, the yield on 2023 bond declined to 4.0%, while that for the longer-dated 2030 issue dipped to 8.83%.

In early trade on Thursday, the US dollar is trading marginally higher against the South African rand at R15.6422, while the euro is trading marginally higher at R18.4222.  The British pound has marginally declined against the South African rand to trade at R20.6736.

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

  • The lira surged after President Recep Tayyip Erdogan vowed to fully support the new central bank governor and economy czar, boosting expectations of an interest-rate hike next week. But investors say they need more evidence that Erdogan’s apparent shift to a more orthodox policy will last. The lira strengthened by as much as 4.2% to 7.8321 per dollar, bucking the weakness across emerging markets.
  • The European Central Bank (ECB) President, Christine Lagarde’s dovish comments. While delivering her opening remarks at the ECB Forum on Central Banking, the ECB Chief warned that even if the second wave of the coronavirus proves to be less intense than the first, it poses no less danger to the economy. Further, she stated that the Pandemic Emergency Purchase Program and Targeted Longer-Term Refinancing Operations (TLTROs) have proven to be effective tools and are therefore likely to remain the main tools for adjusting monetary policy.
  • International Olympic Committee President Thomas Bach will visit Tokyo on Sunday for a review of the 2020 Games’ venues, the organization said Wednesday, and he is also expected to hold talks with Prime Minister Yoshihide Suga while in Japan. Bach said in a news conference following an IOC board meeting that the possibility of canceling the summer games will not be on the agenda during his four-day stay, his first visit to the Japanese capital since the decision in March to postpone the games by one year.

In early trade on Thursday, the euro has marginally slipped against the US dollar to trade at $1.1786, while it has marginally gained against the British pound to trade at GBP0.8916.