Vaccine rollout day 25 / J & J VACCINE DAY 12      

By the close of trade on Thursday 25th February 2021, the South African rand weakened against the US dollar.

  • This was despite South Africa’s 2021 budget speech being largely welcomed by analysts.
  • The United States launched airstrikes in Syria on Thursday, targeting facilities used by Iranian-backed militia groups. The Pentagon said the strikes were in retaliation for a rocket attack in Iraq earlier this month that killed one civilian contractor and wounded a U.S. service member and other coalition troops. The airstrike was the first military action undertaken by the Biden administration, which in its first weeks has emphasized its intent to put more focus on the challenges posed by China, even as Mideast threats persist.
  • In the US, the economy grew slightly faster than first estimated in 4Q20.
  • Fewer Americans filed new claims for unemployment benefits last week, amid falling COVID-19 infections, but the near-term outlook for the labour market is unclear after winter storms wreaked havoc in the Southern region recently.  The number of individuals filing first-time claims for state unemployment benefits fell sharply last week, with a total of 730,000 new claims for the week ended Feb. 20, the Department of Labor reported. The unemployment rate has also been falling, dropping to 6.3% in January. Signs of improvement in the labor market may create the appearance that the economy is gaining strength amid increasing vaccinations for Covid-19.
  • Pending home sales fell in January, amid a continued shortage of houses available for sale.
  • Federal Reserve policymakers are shrugging off the surge in longer-term U.S. government bond yields as a sign of growing optimism about the economy, which could pick up steam as more people are vaccinated against the coronavirus. And none of the officials so far are signaling an interest in lightening up on the U.S. central bank’s accommodative monetary policy stance, even as the yield on the benchmark 10-year Treasury note on Thursday topped the 1.50% level for the first time in a year, sending stocks sharply lower.
  • The January durable goods report shows that the manufacturing sector has well and truly shaken off the disruption from the pandemic. Headline orders rose 3.5% month-on-month, well ahead of the 1.1% consensus and its ninth consecutive monthly rise. Admittedly the highly volatile non-defense aircraft component (Boeing airliners) boosted the figure by jumping 390%, but strip out transportation and orders still rose 1.4% versus the 0.7% consensus forecast.

  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.31%. Further, the yield on 2023 bond advanced to 5.32%, while that for the longer-dated 2030 issue rose to 8.99%.

In early trade on Friday, the US dollar is trading higher against the South African rand at R15.0410, while the euro is trading lower at R18.2777.  The British pound has declined against the South African rand to trade at R21.0265.

By the close of trade on Thursday, the euro advanced against most of the major currencies.

  • The eurozone economic sentiment rose more-than-expected in February, buoyed by more optimism in industries, services as well as among consumers.
  • Reserve Bank Governor Adrian Orr has used his first opportunity to publicly comment on the central bank’s remit tweak to stress this won’t change the way it sets monetary policy. Speaking to the Canterbury Employers’ Chamber of Commerce on Friday, Orr said: “Our Monetary Policy Committee remit targets remain unchanged. “We remain only focused on maintaining low and stable consumer price inflation and contributing to maximum sustainable employment, as recently outlined in our Monetary Policy Statement.” Orr’s comments saw the New Zealand dollar fall from US73.8 cents to US73.2 cents.

In early trade on Friday, the euro has slipped against the US dollar to trade at $1.2163, while it has gained against the British pound to trade at GBP0.8699.