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

  • In the US, talks on top congressional Democrats have endorsed a $908.00bn bipartisan package that calls for $300.00 a week in enhanced unemployment benefits, $288.00bn in assistance for US businesses and $160.00bn for state and local.
  • The Trump administration was preparing economic sanctions on a dozen more Chinese officials, in response to Beijing’s crackdown on dissent in Hong Kong. China hasn’t done a good job in complying with international trade rules — and is the principal military and economic threat in the region, U.S. Secretary of Commerce Wilbur Ross said on Tuesday. Speaking on the opening day of the Milken Institute Asia Summit, Ross said China accounts for 210 out of 539 anti-dumping and countervailing duty orders imposed by the U.S. In addition, China makes up a “good portion” of the U.S. entity list that restricts companies’ access to American suppliers for national security reasons, he said.
  • U.S. consumer borrowing rose in October by less than forecast, reflecting a decline in credit-card balances as the pandemic continued to limit some purchases. Total credit increased $7.2 billion from the prior month after a downwardly revised $15 billion September gain, Federal Reserve figures showed Monday. The median estimate in a Bloomberg survey of economists called for a $15.5 billion increase in October. Revolving credit declined for the seventh time in the past eight months. A $5.5 billion drop in credit-card debt outstanding to a more than three-year low coincides with a slowdown in retail sales
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond dipped to 6.93%. Further, the yield on 2023 bond declined to 4.56%, while that for the longer-dated 2030 issue dropped to 8.92%.

In early trade on Tuesday, the US dollar is trading higher against the South African rand at R15.1562, while the euro is trading higher at R18.3632.  The British pound has declined against the South African rand to trade at R20.2492.

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

  • The talks between European Commission President von der Leyen & UK’s PM Johnson will not be resumed, no second call planned and short written statements soon will be available soon.  After a tense weekend of endgame negotiations, a post-Brexit trade deal between the UK and the EU has once again stalled over final issues such as fishing laws. The UK is set to leave the EU single market and customs union on December 31. A no-deal agreement would spell tough times ahead for both sides. No more special treatment As an EU member, the UK is part of a seamless trading system comprising a single market of over 450 million European consumers. The EU is currently the UK’s largest trading partner, accounting for 43% of all UK exports in 2019, according to government figures.
  • Meanwhile, investor morale in the eurozone improved in December, hitting its best figure since February, on expectations of an economic upswing, given the news of soon to be distributed vaccines to fight the coronavirus pandemic.   The European Union needs a signal from Poland and Hungary on Monday or Tuesday that they will drop their veto of the EU budget and recovery fund, or the bloc will have to set it up without the two member states, a senior EU diplomat said. Warsaw and Budapest, both under EU scrutiny for undermining judicial and media independence, are blocking the budget and the recovery fund because they object to making the money conditional on respect for the rule of law and democratic norms.
  • German industrial production advanced on monthly basis in October, driven by booming car sales, in a further sign that the export-oriented manufacturing sector helped Europe’s largest economy to get off to a solid start in 4Q20.
  • Prime Minister Scott Morrison has new powers to veto or scrap agreements that state governments reach with foreign powers under laws that could stymie China’s Belt and Road Initiative in Australia and further inflame tensions between the trading partners. The laws passed by Parliament on Tuesday will give the foreign minister the ability to stop new and previously signed agreements between overseas governments and Australia’s eight states and territories, and with bodies such as local authorities and universities.

In early trade on Tuesday, the euro marginally advanced against the US dollar to trade at $1.2122, while it has gained against the British pound to trade at GBP0.9122.