Yesterday the US bank holiday brought a sense of calmness to the start of the week. The South African rand however weakened against the US dollar!
- There still exists a lack of clarity on the US-China trade relations. The two countries had reached a “phase-one” agreement last week, which included the US suspending a tariff hike on $250.00bn worth of Chinese goods, while China agreed to purchase more agricultural products from the US.
- However, China indicated that further talks were needed.
- Meanwhile, the US Treasury Secretary, Steven Mnuchin stated that the next round of tariffs on Chinese imports are on track to go into effect on 15 December, if a deal has not been reached by then.
- Separately, the new Head of the International Monetary Fund, Kristalina Georgieva, sees a “serious risk” that the global economic slowdown will spread.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2020 bond advanced to 6.88% while that for the longer-dated 2026 issue fell to 8.22%.
In early trade on Tuesday, the US dollar is trading marginally higher against the South African rand at R14.8243, while the euro is trading 0.1% higher at R16.3526. At 06:00. The British pound has gained 0.1% against the South African rand to trade at R18.7003.
On Monday, the euro advanced against most of the major currencies.
- The European Central Bank (ECB) Vice-President, Luis de Guindos, stated that profitability across the eurozone banking sector is low and weakening economic growth in the region is expected to further dampen the banks’ prospects, making the inevitable consolidation of the sector very difficult.
- Further, the ECB policymaker, Pablo Hernandez de Cos, stated that in the current macroeconomic environment, it was likely interest rates would stay lower for longer, squeezing financial margins further.
- On the data front, the eurozone industrial production rebounded more-than-expected on a monthly basis in August.
- German wholesale price index fell less-than-expected on a monthly basis in September.
- Meanwhile on the Brexit front, the EU’s Chief Brexit negotiator, Michel Barnier, stated that technical-level talks had been “constructive”, but “a lot of work remains to be done”.
In early trade on Tuesday, the euro has marginally advanced against the US dollar to trade at $1.1032, while it has marginally weakened against the British pound to trade at GBP0.8745.
The match officials for the Quarter finals have been announced. They are: