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Watch: June 2020 economic update

Gold has rallied 17% so far this year.

  • Finance Minister Tito Mboweni delivered an emergency budget in parliament on June 24 which provide a very bleak picture of the South African economy. The Covid-19 pandemic has turned the global economy upside down and South Africa is now expected to contract by a further 7.2% in 2020. This will be the greatest contraction the country has seen in nearly 90 years.
  • The rand showed small movement against the dollar after the emergency budget and this was despite a budget deficit forecast to hit a record of 15.7% of GDP. The rand held steady at R17.30 to the dollar.
  • The JSE gained 22% in quarter two of the year, the best level since 2001, thanks to rand hedges and aggressive stimulus by the Reserve Bank to revive the economic fallout due to Covid-19 outbreak.
  • One-month index movements:
    • JSE All Share Index: 6.70%
    • S&P 500 (US): – 0.1%
    • FTSE (UK): 0.1%
  • 12-month index movements:
  • JSE All Share Index: -7.0%
  • S&P 500 (USA): 3.0%
  • FTSE (UK): -17.7%
  • The death of George Floyd under the knee of a US police officer last month has triggered social unrest, this dominated US headlines which caused a global uprising on issues surrounding racism.
  • The US hit its highest single day of new Covid-19 cases, with 45 500 cases exceeding the April record.
  • Covid-19 confirmed cases in South Africa reached 50 000 in 95 days and in a further 14 days it reached over 100 000. This month marked the record with the highest number of cases in one day which was 7 200.
  • The Health Minister has warned that South Africa is on the verge of facing a spike in coronavirus cases and related deaths which means another possible hard lockdown.
  • On a lighter note from Europe:
    • Cyprus has advised when the border reopens, should you contract the virus while visiting, they will cover the costs.
    • On June 1, for the first time, Spain recorded no new deaths related to the virus since March 3.
  • Gold has rallied 17% so far this year, which is the precious metals biggest quarterly jump since 2016. This was driven by the health pandemic and the wave of stimulus that has been injected by governments and central banks to minimise further damage to the economy and investors seeing this asset class as a safe haven.
  • Tencent CEO Pony Ma is currently known to be china’s richest man, valued at $50 billion.

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