Vaccine rollout day 16

By the close of trade on Friday, the South African rand strengthened against the US dollar.  In SA all eyes are on the ZUMA show / don’t show at the Zondo commission.  In the US it is a bank holiday [Presidents Day].

In the US, the Michigan consumer sentiment index unexpectedly fell in early February, amid growing pessimism about the country’s economic recovery, even as the US government is poised to deliver another round of COVID-19 relief money.

  • The US House committee approved half of the US President, Joe Biden’s relief plan, thus advancing $1,400.00 payments to millions of people alongside other measures opposed by Republican lawmakers.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 6.69%. Further, the yield on 2023 bond advanced to 4.67%, while that for the longer-dated 2030 issue rose to 8.50%.

In early trade on Monday, the US dollar is trading lower against the South African rand at R14.5122, while the euro is trading lower at R17.6066.  The British pound has marginally gained against the South African rand to trade at R20.1726.

By the close of trade on Friday, the euro declined against most of the major currencies.

  • Super’ Mario Draghi sworn in as Italy’s new PM can he save its economy like he saved the euro?  Mario Draghi’s life and career may have prepared him for becoming prime minister but he’ll have to navigate treacherous waters.   In 2012, the Eurozone was facing an existential crisis, with the future of the euro itself in doubt. Investors were seeking an ever-greater premium to lend to countries like Spain and Italy and there was real concern in European capitals that at least one country might have to be ejected from the single currency zone. Greece, in particular, was thought likely to default on its debts. It is no exaggeration to say that one man, more than any other, prevented that from happening. He telegraphed his intentions with a single phrase, uttered at a global investment conference at Lancaster House in London on 26 July, 2012 “Within our mandate, the European Central Bank is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.” stated Draghi.
  • In the UK, gross domestic product (GDP) rose on a quarterly basis in 4Q20. However, the BoE forecasted that the economy would shrink by 4.0% in 1Q21, on account of new COVID-19 lockdowns and Brexit disruption.
  • Central banks are accelerating their work on digital currencies and investors are taking note. Earlier this year, the Bank of International Settlements published its latest survey showing that 86% of the 65 central banks it spoke to are doing some form of work on central bank digital currencies (CBDCs), be it research, proofs of concept or pilot development. Almost 15% are moving toward actual research for pilots
  • Europe’s financial capital is feeling the cold of Brexit but UK officials insist London is suffering a temporary blip and is well-positioned to profit from new trading horizons. For the first time last month, as Britain’s withdrawal from the EU took full effect, London’s financial district lost its European share trading crown to Amsterdam. London “continues to go from strength to strength” in emerging financial technology (fintech) and tech investment, as well as green finance.
  • Japan’s recovery held up last quarter, with the economy again growing by double-digits, as exports continued to roar back, businesses started to invest again and government stimulus fueled consumer spending despite a winter surge of the coronavirus. Gross domestic product grew an annualized 12.7% from the prior quarter in the three months through December, the Cabinet Office reported Monday. Economists had forecast a 10.1% expansion.

In early trade on Monday, the euro advanced against the US dollar to trade at $1.2236, while it has weakened against the British pound to trade at GBP0.8766.