By Andre Botha, Senior Dealer, TreasuryONE
Last night, President Cyril Ramaphosa announced a national lockdown for a period of 21 days effective as of midnight on Thursday the 26th. This is in order to slow the rate of infections and contain Covid-19.
Yesterday, the Fed announced unlimited quantitive easing and support for credit markets in a bid to provide Dollar liquidity to the markets but despite these measures, Wall Street once again closed in negative territory as the government’s stimulus plan remains stuck in the Senate. The Dow closed 3.04% down, the S&P 2.93% down and the Nasdaq 0.27% down.
The JSE All-share was 4.89% lower yesterday. Asian markets have however bounced this morning with all indices well in the green.
The Rand closed weaker last night at 17.8203 but is trading firmer this morning at 17.6650 as the positive mood in Asia spreads to the EM currencies. The Dollar is weaker against the Euro, Pound and Yen this morning at 1.0800, 1.1648 and 110.22 respectively. The Aussie and Kiwi currencies have also retraced from their lows this morning.
Gold surged in the wake of the Fed’s liquidity move, closing at $1 553.00 after having touched a $1 484.65 low earlier in the day. This morning the yellow metal price is up a further 1.17% at $1 571.50. (See graph). Platinum and Palladium are also showing some nice gains and are currently trading at $666.30 and $1 816.20 respectively.