Happy New Year to all!

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

  • It seems that the man that flicks the switch at ESKOM has returned from leave and like clockwork the power outages have resumed, breaking President Ramaphosa’s promise that the lights would remain on passed the 13th January 2020
  • Rising tensions in the Middle East pressurized riskier assets, prompting investors to seek safe havens.   Iran announced on Sunday it would abandon limitations on enriching uranium, taking a further step back from commitments to a 2015 nuclear deal with six major powers, but it would continue to cooperate with the U.N. nuclear watchdog.  Iran had been expected to announce its latest stance on the deal this weekend. But its announcement coincided with a major escalation of hostilities with Washington following the U.S. killing of top Iranian military commander Qassem Soleimani in a drone strike on Friday in Baghdad.
  • The Chinese trade delegation tentatively plans to travel to Washington on January 13 for the signing of the phase one agreement that would herald a truce in the costly trade war between the world’s two largest economies.
  • In the US, the ISM manufacturing activity fell into its deepest slump in more than a decade in December, on account of the US-China trade dispute.
  • The Federal Reserve (Fed) December meeting minutes showed that policymakers agreed to hold interest rates as trade tensions with China eased, but they expressed concerns regarding inflation continuing to fall short of 2.0%.
  • The Chicago Fed President, Charles Evans, stated that the US economy is at a good place and the labour market remained strong with FY20 GDP likely to expand between 2.0% and 2.25%.
  • The Dallas Fed Bank President, Robert Kaplan, stated that the US economy is likely to grow in excess of 2.0% while inflation remains low.
  • The yield on benchmark government bonds rose on Friday. The yield on 2020 bond advanced to 6.78% while that for the longer-dated 2026 issue rose to 8.25%.

In early trade on Monday morning, the US dollar is trading 0.1% higher against the South African rand at R14.3151, while the euro is trading 0.1% higher at R15.9849.  The British pound has gained 0.1% against the South African rand to trade at R18.7281.

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

  • The preliminary reading of German consumer price index (CPI) rose more than expected on an annual basis in December but remained below the European Central Bank’s (ECB) target level.

In early trade on Monday, the euro has marginally advanced against the US dollar to trade at $1.1166, while it has marginally gained against the British pound to trade at GBP0.8535.

It is amazing how quickly a few days off whirr by.  Let’s hope that 2020 delivers.