US stocks closed the week higher on Friday buoyed by some positive economic data; IHS Markit August PMI figures came better than expected with services notching almost 5 points at 54.8. the DOW led gains at 0.68% while the NASDAQ and S&P gained 0.41% and 0.34% respectively, both record closes. Yield on 10Y USTS closed lower at 0.6282%.
UK August PMIs showed continued improvement with reading topping expectations across the board. Services bested expectations more, coming at 60.1, with the Composite PMI coming at 60.3. Across the channel however, a contrasting situation was noted: eurozone PMI figures came in lower than expectations across all sectors albeit in expansionary territory. The bright spot however was continued growth in German manufacturing which rose to 53.0 from July’s 51.0. The pound and euro closed weaker at $1.3090 and $1.1797, respectively.
Asian stocks were higher on Monday after Wall Street brushed off lingering concerns over the coronavirus. The HANG SENG led gains up 1.74% while the ASX and the NIKKEI rose 0.30% and 0.28% respectively. The CSI also gained 0.78% with Sino-US tensions seemingly on the back burner.
The real closed lower at 5.6202 as it resumed its slide against the dollar for the week. The Senate had voted down a presidential veto on raises on civil servant salaries, threatening to send the currency hurtling towards May lows before the House upheld President Bolsonaro’s decision. The central bank has been continually stepping in, selling millions in the spot market at a turn to shore up the currency. The real has fallen the most of any other currency so far in 2020.
President Lungu fired central bank governor Denny Kalyalya on Saturday replacing him with Christopher Mvunga, a former deputy finance minister under Lungu; no reason was given for the dismissal of Kalyalya whose term was set to expire in 2023. Kalyalya had continually called on the government to rein in spending amid swelling debt and dwindling reserves. ZAMBIN bonds were trading some 3 points lower mid-morning.