The rand closed out trading on Monday, having weakened against the US dollar.
- In South Africa, Eskom threw the country into total darkness as a New Stage 6 was rapidly introduced bypassing stage 5. This is new territory and where to from here is on everyone’s lips.
- In the US, President, Donald Trump, along with the labour leaders and House Democrats have reached a tentative deal over a rewrite of the US-Mexico-Canada trade deal. If the White House sends ratifying legislation to Congress by Dec. 15 to kick off the approval process, the Democratic-held House could vote on ratifying the United States-Mexico-Canada Agreement by Dec. 18
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2020 bond advanced to 6.86% while that for the longer-dated 2026 issue fell to 8.38%.
In early trade on Tuesday, the US dollar is trading 0.1% lower against the South African rand at R14.6637, while the euro is trading marginally lower at R16.2301. The British pound has marginally gained against the South African rand to trade at R19.2892.
By the close of trade on Monday, the euro advanced against most of the major currencies.
- Seasonally adjusted German trade surplus unexpectedly widened in October, on account of the surprise increase in exports, mainly driven by strong demand from non-European countries.
- Further, the eurozone investor confidence index unexpectedly ticked up in December.
- Meanwhile, in the UK, the latest poll from Survation showed that the Tories are enjoying a 14-point lead in the upcoming general elections.
In early trade on Tuesday, the euro has marginally advanced against the US dollar to trade at $1.1067, while it has marginally weakened against the British pound to trade at GBP0.8416
UK ELECTION: PROXY FOR A SECOND EU REFERENDUM
On December 12th, the UK will go back to the polls in order to break the current gridlock in parliament. The general election has been seen as a proxy for a second EU referendum with voters choosing between Boris Johnson’s Brexit deal or a remain alliance, which would entail the possibility of staying within the EU.
In turn, the outcome of the general election will shape the Brexit process in 2020. That said, other policies are also important with both the Conservatives and Labour party pledging more expansionary fiscal policy.
What do the polls show?
Much like 2017, opinion polls have been pointing to a Conservative majority, who have enjoyed a commanding lead over their nearest rivals (Labour). However, unlike that of two years ago, the Tories have managed to maintain a sizeable lead, having seemingly unified the pro-Brexit vote with an added boost from Nigel Farage’s Brexit party, who will not be campaigning for Tory seats won in 2017.
By contrast, the opposition seem somewhat divided over Brexit, thus failing to narrow the gap, which in turn has made a Conservative majority the more likely outcome.
Alongside this, the YouGov MRP poll, which had correctly called 93% of seats at the previous election highlighted that the Conservatives were on course to win 359 seats, which would result in a 68 seat majority. A final YouGov MRP poll will be released on December 10th at 2200GMT.
Current State of Parliament: 326 Seats for Working Majority
It is still cooler and wet along the East Coast. If you are on the roads be safe. Have a great day.