Happy Friday everyone! Friday the 13th Nogal.
What a week!
By the close of trade on Thursday, the South African rand weakened against the US dollar.
- The Federal Reserve has stepped into financial markets for the second day in a row and the third time this week, this time dramatically ramping up asset purchases amid the turmoil created by the coronavirus. “These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement released early Thursday afternoon amid a washout on Wall Street that was heading toward the worst day since 1987.
- Stocks plummeted once again on Thursday after President Donald Trump and the Federal Reserve failed to quell concerns over the possible economic slowdown stemming from the coronavirus, leading to historic moves in U.S. markets.
- In the US, the number of people filing for unemployment benefits unexpectedly fell for the week ended 6 March, as employers continued to hold on to their workers.
- In South Africa, manufacturing production index fell less than expected for the eighth consecutive month in January, on account of a decline in wood and wood products, paper, publishing and printing division.
- On the contrary, producer price index (PPI) fell by the most in five years in February, pulled down by declines in the costs of goods such as gasoline and services.
- The yield on benchmark government bonds ended mixed yesterday. The yield on 2021 bond declined to 6.02% while that for the longer-dated 2030 issue rose to 9.81%.
In early trade on Friday, the US dollar is trading 0.3% higher against the South African rand at R16.5975, while the euro is trading 0.6% higher at R18.6097. The British pound has gained 0.3% against the South African rand to trade at R20.8431.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- The European Central Bank (ECB) kept its key interest rate on hold, despite market expectations for a reduction amid the ongoing coronavirus outbreak. However, the central bank announced that a temporary envelope of additional net asset purchases of EUR120.00bn will be added until the end of the year, ensuring a strong contribution from the private sector purchase programs.
- The ECB President, Christine Lagarde, stated that the coronavirus outbreak has inflicted a major shock to global growth and governments will need to mount an ambitious fiscal response to counter its affects.
- On the data front, eurozone industrial production rose more than expected on a monthly basis in January, indicating that a recovery in the bloc was underway before the coronavirus began hitting the economy last month.
In early trade on Friday, the euro has advanced 0.3% against the US dollar to trade at $1.1215, while it has gained 0.4% against the British pound to trade at GBP0.8932.
NOVEL CORONAVIRUS STATS
134,113 confirmed cases
4,967 reported deaths
Last updated 7:52am Mar 13, 2020