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

  • On Friday evening, Moody’s Investors Service and Fitch Ratings both downgraded South Africa’s debt further into junk status. Moody’s placed the nation at two notches into junk, while Fitch moved it three notches below investment grade.
  • In the US, Treasury Secretary, Steven Mnuchin told Fed Chairman, Jerome Powell, that the $455.00bn allocated to the Treasury under the CARES Act should be instead available for Congress to reallocate, sparking uncertainty about stimulus programs.
  • Meanwhile, the Dallas Fed President, Robert Kaplan, again called for more fiscal support for the US economy, particularly for state and local governments struggling with budget holes and for the millions of unemployed who are spending down savings from prior aid.
  • President Donald Trump’s desperate bid to overturn the Nov. 3 election result was dealt another blow on Friday after it was announced he had lost Georgia, while the winner, President-elect Joe Biden, filled more jobs in his incoming U.S. administration. Biden, a Democrat, is preparing to take office on Jan. 20, but Trump, a Republican, has refused to concede and is seeking to invalidate or reverse the results through lawsuits and recounts in a number of states, claiming – without proof – widespread voter fraud.
    A federal judge on Saturday dismissed a lawsuit critical to President Donald Trump’s long-shot bid to overturn his Nov. 3 election loss to Democratic President-elect Joe Biden, calling his legal claim a “Frankenstein’s Monster.”
  • Leaders of the world’s 20 biggest economies have pledged to address the global recession caused by the coronavirus and outlined plans to accelerate an equitable and sustainable recovery at the conclusion of the historic G-20 summit in Saudi Arabia. “We are committed to leading the world in shaping a strong, sustainable, balanced and inclusive post-COVID-19 era,” G-20 leaders declared in a twelve page document released on Sunday evening. Saudi Arabia’s historic G-20 presidency, the first ever for an Arab country, has been dominated by the need to address the economic and social impact of the ongoing pandemic.
  • The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond dropped to 6.93%. Further, the yield on 2023 bond declined to 4.18%, while that for the longer-dated 2030 issue remained steady at 8.81%.

In early trade on Monday, the US dollar is trading lower against the South African rand at R15.3866, while the euro is trading lower at R18.2712.  The British pound has marginally declined against the South African rand to trade at R20.4744.

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

  • China continued economic recovery from COVID-19 in the third quarter of 2020 with year-on-year growth of 4.9 per cent. Though the headline number fell short of expectations, the broadening of growth on both the demand and supply sides bodes well for the rest of the year. The consensus forecast for growth this year is now 2.2 per cent and China remains the only major economy for which GDP is expected to grow.
  • On the data front, the eurozone’s consumer confidence index further deteriorated in November.
  • New Japanese Prime Minister Yoshihide Suga has promised continuity after Shinzo Abe’s sudden resignation. Since his inauguration, Suga has promoted his own policy agenda in domestic issues such as digital transformation. Like Abe, he also began diplomacy by prioritising the US–Japan and the Australia–Japan relationship, but his approach to foreign policy differs from Abe’s. Suga’s political commitment to foreign affairs is secondary to the focus on domestic issues. Abe’s foreign policy was unique in Japan’s post-war history as he was actively engaged in diplomacy and spread Japan’s diplomatic wings.

In early trade on Monday, the euro advanced against the US dollar to trade at $1.1866, while it has weakened against the British pound to trade at GBP0.8922.