IMF Approves $4.3 Billion for South Africa Under RCF Programme
UNITED STATES
US stocks rebounded on Monday as investors awaited the next round of stimulus. The NASDAQ led gains, up 1.67% while the S&P and the DOW rose 0.74% and 0.43% respectively. The Republicans announced their latest $1 trillion plan after Wall Street trading. Yield on 10Y USTs closed higher at 0.6151%.
EUROPEAN UNION
Germany’s Ifo business climate index rose for a third straight month in July as expectations of improving economic prospects grew in the wider economy. The index cam at 90.5 beating a Dow Jones Newswires forecast of 89.0 points, and up from June’s 86.3. the euro continued its ascent against the dollar closing at $1.1752 while yield on 10Y DBRs closed lower at -0.491%.
ASIA
Asian stocks opened higher on Tuesday buoyed by growing momentum on the next set of US stimulus. Stocks however retreated from the session highs with the ASX and the NIKKEI shed 0.39% and 0.26% respectively while the CSI and the HANG SENG held on to close 0.54% and 0.68% respectively.
MENA
Moody’s downgraded Lebanon to C – the same level as Venezuela – on Monday warning bondholders that losses through the current default could exceed 65%. The official peg of 1,500 pounds per dollar has now unravelled with the parallel market rate closer to 8,000 while official support for essential items and food is being done at a rate of 3,900 by the central bank. The IMF may not provide the $10 billion bailout sought out, potentially providing only half of it, adding to the woes of a country deeply in need of a rescue package.
LATAM
The latest Brazil central bank survey saw economists up their projections of economic growth for 2020 ahead of an almost unanimous bet that the central bank will continue easing. The median forecast that the economy will shrink 5.77% this year shows the ‘improving’ sentiment towards the economy given the same survey estimated 6.54% contraction a month back. The real closed firmer at 5.5106 to the dollar while BRAZIL 30s were higher, trading in the high 100 levels.
SSA
The IMF approved $4.3 billion for South Africa on Monday in what is the largest disbursement under its Rapid Credit Facility. With over 450,000 cases confirmed as at Monday, the country is worst hit on the continent and 5th worst globally. Meanwhile, Angola wants to increase the $3.7 billion IMF loan to $4.5 billion to help the fight against the coronavirus. A FinMin official speaking on Monday was confident this could be approved as early as end-July when the existing programme is reviewed. The rand closed firmer at 16.4249 to the dollar while SOAF 29s were higher, trading in the low 97s.