TOTAL DAYS 10 months & 6 days – 07 HOURS 40 MINUTES

By the close of trade on Thursday 7th January 2021, the South African rand weakened against the US dollar.

  • Rising domestic COVID-19 infections and a worrying public debt trajectory.
  • As President Donald Trump stood idly by with violent protestors ransacking the U.S. Capitol on Wednesday, at least two of his top officials and closest allies conferred with staff about the possibility of invoking the 25th Amendment. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin held informal conversations within their own agencies about the contours of the 25th Amendment, the invocation of which would begin a process to remove Trump from office.  Remarks in the last 12 hours made by Trump are the first indications that he may have conceded to Vice president elect Joe Biden.   Vice President Pence opposed calls to invoke the 25th Amendment to remove President Trump.
  • Now that a “blue sweep” of Congress is reality, Wall Street has thrown out their existing market and economic forecasts and gone back to the drawing board to account for billions more in imminent stimulus. Not surprisingly, the first to publish a new and improved projection deck was Goldman which overnight said it had revised its forecasts for GDP, the unemployment rate, inflation, and Fed policy to reflect the results of the Georgia Senate elections as well as the latest news about the slow progress of vaccination so far in the US and the new, more infectious strains of the virus that are spreading globally.
  • In the US, ISM services industry activity accelerated in December, but COVID-19 infections depressed employment prospects, thus heightening the risk that the US economy could shed jobs for the first time since the labor market recovery from the pandemic started.
  • People filing first-time claims for jobless benefits unexpectedly dropped for the week ended 1 January 2021.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 6.71%. Further, the yield on 2023 bond advanced to 4.50% while that for the longer-dated 2030 issue rose to 8.79%.

In early trade on Friday, the US dollar is trading lower against the South African rand at R15.4222, while the euro is trading lower at R18.9123.  The British pound has declined against the South African rand to trade at R20.915.

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

  • In the eurozone, economic sentiment improved in December. Meanwhile, the region’s consumer price index fell on an annual basis in December.
  • Japan’s household spending unexpectedly rose for a second straight month in November, as consumer sentiment showed further signs of recovery from the damage inflicted by the coronavirus pandemic. A one-month state of emergency for the Tokyo area approved by the government on Thursday is likely to hurt the recovery in domestic demand, with some analysts expecting the economy to fall into contraction in the first quarter of this year. Household spending rose 1.1% in November compared to the same month a year earlier, official data showed on Friday, beating a median forecast for a 1.5% decline.
  • After little less than a year of negotiations, the United Kingdom and the European Union reached an agreement on their future relationship, which goes by the name of Trade and Cooperation Agreement (TCA). The TCA removes all tariffs and quotas and avoids the alternative of having to resort to WTO rules, making it highly significant, and for certain (agri-)sectors and manufacturing industries very much worth having. That said, it is also the first major agreement in recent history in which trade barriers were raised instead of lowered.

In early trade on Friday, the euro has slipped against the US dollar to trade at $1.236, while it has marginally weakened against the British pound to trade at GBP0.9066.