LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 29]
Wave 2 NEW VARIANT
TOTAL DAYS 336 – 7 HOURS 45 MINUTES
Vaccine rollout day 23 / J & J VACCINE DAY 10
By the close of trade on Wednesday 24th February 2021, the South African rand strengthened against the US dollar.
- In the 2021 Budget speech, Finance Minister, Tito Mboweni reversed a decision to raise an extra R40.00bn ($2.80bn) over the next four years.
- He also allocated funds for COVID-19 vaccines and set more ambitious debt-consolidation targets, while sticking to a pledge to freeze state workers’ wages.
- Also, inflation-beating relief was announced for individuals, along with a 1 percentage point cut in corporate tax from April 2022.
- Mboweni’s speech was dotted with light hearted humor and quotes from the ages. Mboweni himself came up with a pearler “We must do more with less, in the hope that we can make more”.
- SIN tax was prominent with a rise in alcohol
- In the US, sales of new US single-family homes increased more-than-expected in January, boosted by historically low mortgage rates and an acute shortage of previously owned houses on the market.
- Federal Reserve Chairman, Jerome Powell stated that the central bank would keep its attention focused on getting Americans back to work as a COVID-19 vaccine-related recovery proceeds. It may take more than three years to reach the Federal Reserve’s inflation goals, a further signal the U.S. central bank plans to look beyond any post-pandemic spike in prices and leave interest rates unchanged for a long time to come. “We are just being honest about the challenge,” Powell told the House of Representatives Financial Services Committee when asked about Fed projections that inflation will remain at or below the central bank’s 2% target through 2023.
- Also in the US, retail sales are expected to grow this year between 6.5% and 8.2%, amounting to more than $4.33 trillion in sales, as the U.S. economy begins to reopen, and more and more individuals receive the Covid vaccine, the National Retail Federation said Wednesday. A preliminary reading shows that retail sales grew 6.7% to $4.06 trillion last year, the industry’s leading trade group said. That was largely boosted by nearly 22% growth online. Over the course of the year, more Americans turned to websites and apps to buy groceries, comfortable clothing and home goods.
- Democrats in the U.S. Senate have chosen to move forward with the next pandemic relief package using reconciliation. The arcane process that allows certain bills to circumvent the filibuster rules and pass with only 50 votes, not the typical 60. In light of this, Democrats have increased the estimate of the final size of the fiscal package to a range of $1.5 trillion to $1.9 trillion (likely closer to the higher end of that range). This means an increase in the U.S. growth forecasts for 2021.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.13%. Further, the yield on 2023 bond advanced to 5.17%, while that for the longer-dated 2030 issue fell to 8.80%.
In early trade on Thursday, the US dollar is trading higher against the South African rand at R14.5326, while the euro is trading higher at R17.6671. The British pound has gained against the South African rand to trade at R20.5466.
By the close of trade on Wednesday, the euro declined against most of the major currencies.
- Bank of England officials brushed aside suggestions that the economy is about to suffer from higher inflation anytime soon as it struggles with the fallout of the coronavirus pandemic. Answering questions from lawmakers on Wednesday, policy makers said data monitored by the central bank don’t show evidence of inflation overshooting its 2% target. A surge in household savings under lockdown has fueled speculation of a rapid increase in consumer demand as the government starts to unwind virus restrictions next month.
- German gross domestic product (GDP) rose more-than-market expectations, driven by strong exports and solid construction activity. However, stricter lockdown measures domestically and abroad are clouding the outlook for Europe’s largest economy.
- China’s centrally-administered state-owned enterprises (SOEs) are making growth plans for the 14th Five-Year period (2021-2025), with a focus on high-quality development to underpin broader economic and social development. The growth targets of China’s central SOEs will be specified once the country’s 14th five-year plan for economic and social development is approved by the top legislature, said Hao Peng, chief of the State-owned Assets Supervision and Administration Commission (SASAC), at a press conference on Tuesday.
In early trade on Thursday, the euro marginally advanced against the US dollar to trade at $1.2172, while it has marginally weakened against the British pound to trade at GBP0.8636.