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

  • Reports of a significant breakthrough abound and after a separate media report from China claimed that researchers had found two separate drugs that can inhibit the effect of the new strain of the coronavirus.  Central banks to the rescue? As the coronavirus spreads, market participants are trying to assess whether global central banks will make a concerted effort to stem the damage in their respective economies by leveraging monetary policy tools. China’s leader, Xi Jinping, said on Wednesday that China is in a “critical moment” of its fight against the coronavirus epidemic as the death toll and number of infections continued to soar.  Health officials in China said on Thursday that 563 people had died from the virus, up from nearly 500 people the day before, and that 28,018 cases had been confirmed. On Monday, the number of confirmed cases was put at 20,438, meaning the number increased more than 35 percent in just a few days
  • President Donald Trump was acquitted by the US Senate on Wednesday following a historic impeachment trial that shone a harsh light on America’s divisions, without ever shaking the loyalty of his voter base.
  • On the data front, the South African business activity rebounded on an annual basis in January, on account of slower contractions in both company output and new orders.
  • In the US, ADP private payrolls rose to its highest level since May 2015, in January.
  • ISM non-manufacturing index increased to its highest level in six months, in January, with industries reporting increases in new orders, suggesting that the economy could continue to grow moderately this year.
  • The yield on benchmark government bonds fell yesterday. The yield on 2021 bond declined to 6.47% while that for the longer-dated 2030 issue fell to 8.83%.

In early trade on Thursday, the US dollar is trading 0.2% lower against the South African rand at R14.7521, while the euro is trading 0.2% lower at R16.2229.  The British pound has declined 0.1% against the South African rand to trade at R19.1571.

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

  • The eurozone retail sales dropped to its lowest level in more than two years on a monthly basis in December.
  • Meanwhile, the eurozone business activity rose to a five-month high in January, indicating that worst might be over for the bloc’s economy.
  • Activity in Germany’s services sector grew at its strongest pace in five months in January, boosting expectations that domestic demand will give impetus to the economy weakened by a recession in manufacturing.

In early trade on Thursday, the euro has marginally slipped against the US dollar to trade at $1.0997, while it has gained 0.1% against the British pound to trade at GBP0.8469.