By the close of trade on Wednesday, the South African rand weakened against the US dollar.
- The United States and South Korea will postpone, until further notice, joint military exercises planned for the spring due to the spread of a new coronavirus, the two sides said Thursday. South Korea has been hit by a rapid rise in infections, with the total topping 1,500 as more than 300 new cases were reported Thursday. An official of South Korea’s Joint Chiefs of Staff said the postponement was made for the safety of both South Korean and U.S. soldiers, and for the need to contain the epidemic after the nation elevated the alert status for COVID-19 to its highest level.
- US President, Donald Trump, stated that the risk to the American people from the virus remained very low and that the country would spend whatever is appropriate to combat the disease. U.S. health authorities said they’ve identified a first case of coronavirus that doesn’t have ties to a known outbreak, a worrying signal that the virus is already circulating in the U.S. despite reassurances from the Trump administration that it’s been contained.
The U.S. Centers for Disease Control and Prevention said the patient doesn’t appear to have traveled to China or been exposed to another known case of the coronavirus. Health authorities have been increasingly concerned about what’s known as community spread, where the virus begins circulating freely among people outside of quarantines or known contacts with other patients. The new case brings the total of known infections in the U.S. to 15, not counting repatriated Americans.
- Austria sealed off the 108-room Grand Hotel Europa in the Alpine tourist hub of Innsbruck after an Italian receptionist tested positive for the flu-like virus that originated in China and has spread to about 30 countries. Italy has become a frontline in the global outbreak of the virus, with 280 cases and 10 deaths, most in Lombardy and nearby Veneto
- The South African Finance Minister, Tito Mboweni, announced plans for a R160.20bn reduction in the wage bill over the next three years, taking a major step towards fiscal sustainability.
- In the US, new home sales surged in January, as low mortgage rates have helped lift homebuying activity.
- Markets are trying to find their feet, after the second consecutive day of 3%+ drops in US shares. US ten-year bond yields fell to record lows, weighing on the US dollar. The latest trigger has been a spread of the coronavirus disease to additional countries in Europe including Germany, Switzerland, Austria, Croatia, and mainland Spain. The first infection was also reported in Brazil. The number of cases in South Korea has surpassed 1,100 while only China – the epicenter of the outbreak – has announced a deceleration in the number of deaths.
- As concerns about a fast-spreading viral outbreak escalate, Wall Street is increasingly betting the Federal Reserve will step in to shield the US economy from strains. The market-based probability that the central bank would slash interest rates three times this year was roughly 80% on Wednesday morning, with investors expecting a cut as soon as April
- The yield on benchmark government bonds fell yesterday. The yield on 2021 bond declined to 6.18% while that for the longer-dated 2030 issue fell to 8.68%.
In early trade on Thursday, the US dollar is trading 0.1% lower against the South African rand at R15.3006, while the euro is trading 0.1% higher at R16.6827. The British pound has gained 0.1% against the South African rand to trade at R19.7703.
By the close of trade on Wednesday, the euro advanced against most of the major currencies.
- The European Central Bank (ECB) President, Christine Lagarde, repeated her call for eurozone governments to use their budgetary leeway to boost growth amid the bloc’s slowdown. On the data front, French consumer confidence held steady in February.
- The EU published its mandate for talks about future relations with the UK which are set to begin on Monday. Brussels demands a level-playing field that London opposes.
In early trade on Thursday, the euro has advanced 0.2% against the US dollar to trade at $1.0903, while it has gained 0.1% against the British pound to trade at GBP0.8439.