LOCKDOWN LEVEL 1 Ver2 [DAY 22]
TOTAL DAYS 254 – 07 HOURS 40 MINUTES
By the close of business on Wednesday, the South African rand weakened against the US dollar.
- Federal Reserve Chair Jerome Powell urged Congress to approve additional stimulus spending as the COVID-19 crisis ramps up over the next few months, focusing aid on unemployed workers, small businesses and state and local governments. “There are many sectors that could use some help,” Powell said in response to questions before the House Financial Services Committee. “I would start with the labor market. I think we ought to remember that despite the rapid progress in getting people back to work, which is so welcome, there is still 10 million people who are out of work because of the pandemic.”
- OPEC and Russia resume talks on Thursday in a bid to define policies for 2021 after an initial round of discussions this week failed to bring a compromise on how to tackle weak oil demand amid a second coronavirus wave. The group of OPEC and allies, known as OPEC+, had been widely expected to roll over existing oil cuts of 7.7 million barrels per day, or 8 percent of global supplies, at least until March 2021. But after hopes for a speedy approval of anti-virus vaccines spurred an oil price rally at the end of November, several producers started questioning the need to tighten oil policy
- In the US, the Fed’s Beige book report showed that officials saw little or no growth in four of their 12 regional districts and only modest growth in the others in recent weeks, as a rapidly spreading health crisis and ongoing recession continued to devastate some US businesses.
- The Dallas Fed President, Rob Kaplan, stated that US economic growth could stall out by the end of the year if the coronavirus pandemic continues to spike across the country.
- On the data front, private payrolls increased less-than-expected in November, as soaring new COVID-19 infections led to a wave of business restrictions.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2026 bond fell to 7.04%. Further, the yield on 2023 bond advanced to 4.49%, while that for the longer-dated 2030 issue remained steady at 8.99%.
In early trade on Thursday, the US dollar is trading lower against the South African rand at R15.2936, while the euro is trading higher at R18.5487. The British pound has gained against the South African rand to trade at R20.4766.
By the close of trade on Wednesday, the euro advanced against most of the major currencies.
- Time is fast running out for post-Brexit trade talks between the European Union and British government and for U.S. congressional fiscal stimulus negotiations. Both of these remain bogged down, and failure to compromise would have adverse short-term economic implications. Investors are becoming more uneasy. Sterling dropped 0.9% against the dollar overnight, and U.S. and European share prices slipped overnight. British officials approved the Pfizer vaccine for Covid-19 for emergency use. New cases and deaths from the disease have accelerated, with the past 24 hours seeing 187k global deaths. Talks remained snagged on fishing rights in British waters, ensuring fair competition guarantees and ways to solve future disputes.
- In the eurozone, producer price Index (PPI) rose more-than-expected on a monthly basis and unemployment rate fell in October, as the economy continued to recover before the second wave of the COVID-19 pandemic struck.
German retail sales rebounded more-than-expected in October, as consumers stocked up on essentials before a second partial lockdown to contain the coronavirus.
China to allow Australia thermal coal cargo to come ashore even with ban (4 ships total)
In early trade on Thursday, the euro advanced against the US dollar to trade at $1.2156, while it has weakened against the British pound to trade at GBP0.9122.