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

  • South Africa witnessed a rapid increase in the number of COVID-19 infections. President Ramaphosa is set to address the Nation tonight at 20h00. A new version is imminent.
  • In the US, producer prices moderately rose in November, supporting views that inflation would remain benign in the near term as a flare-up in new COVID-19 infections restrains the labour market and demand for services. Meanwhile, the Michigan consumer sentiment index improved in December.
  • Moody’s Investors Service (“Moody’s”) commented that the US emergency use authorization for Pfizer and BioNTech’s COVID-19 vaccine is positive for Pfizer’s credit profile. The authorization follows recent authorizations in several other countries, including the United Kingdom and Canada, and represents the final milestone prior to vaccine distribution. Distribution is beginning immediately, consistent with a supply agreement with the US government in which various government agencies will manage the allocation and distribution.
  • Hackers backed by a foreign government have been monitoring internal email traffic at the U.S. Treasury Department and an agency that decides internet and telecommunications policy, according to people familiar with the matter. “The United States government is aware of these reports and we are taking all necessary steps to identify and remedy any possible issues related to this situation,” said National Security Council spokesman John Ullyot.
  • The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond dropped to 6.88%. Further, the yield on 2023 bond advanced to 4.65%, while that for the longer-dated 2030 issue declined to 8.79%.

In early trade on Monday, the US dollar is trading lower against the South African rand at R15.0836, while the euro is trading lower at R18.3032.  The British pound has gained against the South African rand to trade at R20.1066.

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

  • A slightly positive tone to EU-UK post-Brexit negotiations on Sunday mean the market is likely to send the British Pound higher on Sunday evening, when foreign exchange markets in Asia open for the week. “Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over we think it is responsible at this point to go the extra mile,” said EU Commission President Ursula von der Leyen in a statement released on behalf of her and UK Prime Minister Boris Johnson on Sunday 11:45 GMT.  The pair discussed “major unresolved topics” during their call. The two sides had said Sunday was the deadline for a decision on whether to continue with talks, with the UK set to leave EU rules at the end of the month. The two leaders agreed to tell negotiators to carry on talks in Brussels “to see whether an agreement can even at this late stage.
  • The German Bundesbank stated that the economy will contract less this year than previously projected and that its rebound will accelerate once the economy can start to reopen from the second wave of the pandemic next year.
  • On the data front, German consumer price index (CPI) dropped in line with investor expectations in November.

In early trade on Monday, the euro advanced against the US dollar to trade at $1.2134, while it has weakened against the British pound to trade at GBP0.9103.