Turkey posts budget surplus in November
US stocks closed mixed on Monday as New York and parts of Europe tightened COVID-19 restrictions even as a vaccine rolled out in the US. The DOW retreated from an intraday high to close 0.62% lower while the S&P shed 0.44%; the NASDAQ gained 0.50% however. Yield on 10Y USTs closed about flat at 0.8931%.
The pound closed higher at $1.3324 to the dollar on Monday as hopes resurfaced that a trade deal with the EU could be reached before the end of the year. While officials privy to negotiations said both parties remain far apart, the move by Prime Minister Boris Johnson to send the British negotiating team back to the table despite the passing of the Sunday deadline gave hope that both sides remain keen to find a solution. Yield on 10Y UKTs closed 5bps higher at 0.222%.
Asian stocks were lower on Tuesday taking cue from Wall Street as rising infections in the Western world tempered market optimism. The HANG SENG led the slide, down 0.69% while the ASX and the NIKKEI were down 0.43% and 0.17% respectively. The CSI pared early losses to close 0.06% lower following the announcement that November exports grew over 20%.
Strong tax returns in November pushed Turkey’s budget to surplus following two months of deficit. Revenues rose 32% YoY for the month and 14%, adjusted for inflation. The 13.4 billion liras ($1.7 billion equivalent) surplus lowered the deficit for the year to 132.1 billion liras; for November 2019 the year-to-date deficit stood at 92.9 billion liras. The lira closed slightly weaker at 7.8540 to the dollar while TURKEY 30s were about flat trading in the mid 141s.
Reduced cash handouts by the Brazilian government prompted a slowing down in the economic recovery with the economic activity index rising 0.86% in October, about half September’s 1.68% gain; YoY, the index was 2.61% lower. With the government cash handouts ending in December, the path to recovery may be jolted as unemployment is at record highs and COVID-19 cases still on the rise. The real closed over 1% weaker at 5.1163 to the dollar while BRAZIL 30s were flat, trading in the low 105s.
South Africa joined the list of countries imposing new restrictions to curb surging COVID-19 restrictions threatening to curtail the economic recovery. The economy had exited recession in Q3, but business and consumer confidence remain at their lowest in years. Figures from the Reserve Bank’s quarterly bulletin showed FDI outflows of an equivalent $1 billion in Q3 from $1.05 billion inflows in Q2 while portfolio outflows came at ZAR28.8 billion from Q2’s ZAR54.8 billion. The rand closed firmer at 15.0332 to the dollar while SOAF 30s were about flat, trading in the mid 113s.