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

  • In South Africa, trade surplus widened in October.
  • In the US, pending home sales fell for a second straight month in October, as an acute shortage of properties pushed up prices.
  • Federal Reserve Chairman Jerome Powell emphasized the importance of the lending programs it has deployed during the coronavirus pandemic, telling senators in testimony to be delivered Tuesday that they’ve been integral in keeping the economic fallout from being worse. Many of the key programs that the central bank has used since March are expiring at the end of the year, and the Fed will be forced to return the funding that supports them. “These programs serve as a backstop to key credit markets and have helped restore the flow of credit from private lenders through normal channels
  • A 19-year-old Texas man was slapped with a two-year prison sentence Monday for threatening to blow up the Federal Reserve in a Twitter post, federal prosecutors announced. Joel Hayden Schrimsher told the FBI he was just being “edgy” when he said in a post last year, “I’m gonna mail a bomb to the Federal Reserve,” the US Attorney’s Office in Southern Texas said in a press release. When cops raided Schrimsher’s home in Harlingen on June 6, 2019, they found chemicals and bomb-making recipes, along with a phony certificate on his cellphone declaring himself “Most Likely to Damage Federal Property,”
  • The Chicago Business Barometer dropped in November, as the survey’s new orders measure dropped for the first time since May, when the recovery from the pandemic started.
  • Meanwhile, the Dallas Federal Reserve (Fed) Bank President, Robert Kaplan, stated that he expects strong economic growth in 2H21, once newly developed COVID-19 vaccines get rolled out widely, but with cases surging now he sees a “very difficult” next three to six months.
  • OPEC members reached a broad consensus on the need to extend existing oil production cuts for three months from January if their allies in the wider OPEC+ group also support such a move, ministers and delegates said on Monday. Algerian Energy Minister Abdelmadjid Attar, holder of the Organization of the Petroleum Exporting Countries’ rotating presidency, said there was “consensus at the OPEC level.”   He spoke before OPEC ministers began their talks on a policy that would help producers cope with weak demand in 2021 due to the coronavirus crisis.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond climbed to 7.08%. Further, the yield on 2023 bond advanced to 4.41%, while that for the longer-dated 2030 issue rose to 8.97%.

In early trading on Tuesday, the US dollar is trading lower against the South African rand at R15.4262, while the euro is trading marginally lower at R18.4332. The British pound has marginally declined against the South African rand to trade at R20.6022.

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

  • German consumer price index (CPI) further dropped on an annual basis in November, pushed down by a VAT cut introduced as part of the government’s stimulus push to help Europe’s largest economy recover from the coronavirus shock.
  • At its meeting today, the Board of the Reserve Bank of Australia, decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on 3-year Australian Government bonds, as well as the parameters of the Term Funding Facility and the government bond purchase program. Globally, the news has been mixed recently. On the one hand, infection rates have risen sharply in Europe and the United States and the recoveries in these economies have lost momentum. On the other hand, there has been positive news on the vaccine front, which should support the recovery of the global economy.

In early trade on Tuesday, the euro advanced against the US dollar to trade at $1.1980, while it has marginally weakened against the British pound to trade at GBP0.9022.