LOCKDOWN LEVEL 1 Ver1 [ DAY 9]
TOTAL DAYS 349 – 7 HOURS 30 MINUTES
Vaccine rollout day 37 / J & J VACCINE DAY 25
By the close of trade on Monday 8th March 2021, the South African rand weakened against the US dollar. The Royal soap opera ratcheted up a gear as the Harry and Meghan take on the Monarchy [AKA THE FIRM].
- Prospects of higher inflation and interest rates in major economies saw investors pull money from emerging markets.
- In the US, wholesale inventories increased in January even as sales surged, indicating strong demand that aligns with expectations for faster economic growth. U.S. wholesale inventories increased solidly in January despite a surge in sales, suggesting inventory investment could again contribute to economic growth in the first quarter. The Commerce Department said on Monday that wholesale inventories rose 1.3% as estimated last month. Stocks at wholesalers gained 0.6% in December. The component of wholesale inventories that goes into the calculation of gross domestic product also increased 1.3% in January. Inventories rose 0.6% in January from a year earlier. Businesses are replenishing inventories after they were drawn down early in the coronavirus pandemic.
- U.S. Treasury Secretary Janet Yellen said on Monday that President Joe Biden’s $1.9 trillion coronavirus aid package will provide enough resources to fuel a “very strong” U.S. economic recovery, but will not address longstanding inequality problems. “This is a bill that will really provide Americans the relief they need to get to the other side of the pandemic, and we expect the resources here to really fuel a very strong economic recovery.
- The Technology sector took one for Wall Street overnight, falling over 2% in the face of rising yields. 74 stocks within the Nasdaq 100 declined, 28 advanced and none were left flat by the close. Weakness in the technology sector remains a biproduct of stronger yields, following the passage of the $1.9 trillion COVID-19 fiscal stimulus package by the US Senate. Whilst the S&P 500 and Russell 2000 weren’t as hard hit they did leave small bearish hammers on the daily charts which closed beneath their 10 and 20-day eMAs.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.76%. Further, the yield on 2023 bond advanced to 5.49% while that for the longer-dated 2030 issue rose to 9.53%.
In early trade on Tuesday, the US dollar is trading lower against the South African rand at R15.5172, while the euro is trading marginally lower at R18.4066. The British pound has marginally gained against the South African rand to trade at R21.4866.
By the close of trade on Monday, the euro declined against most of the major currencies.
- The UK’s lead Brexit minister has called on the EU to “shake off any remaining ill will” over the UK’s decision to leave the organisation. Lord Frost said the EU’s previous threat to block vaccine exports had “significantly undermined” post-Brexit measures in Northern Ireland. He insisted the UK’s unilateral move to extend grace periods on border checks was legal under the Brexit trade deal. The EU disputes this, and is preparing to launch a legal challenge. The UK has said it will delay new checks on goods arriving into Northern Ireland from Great Britain, agreed as part of the UK’s withdrawal deal.
- Japan confirmed its economy grew by double-digits at the end of last year, according to revised data that continued to show strength even as this quarter’s virus emergency sets back the recovery for the time being. Gross domestic product grew an annualized 11.7% from the prior quarter in the three months through December, the Cabinet Office reported Tuesday in figures that were a touch weaker than an earlier estimate.
- German industrial production fell on a monthly basis in January.
- Investor morale index in the eurozone jumped to its highest reading in over a year in March, driven by an improved view of the current situation.
- In the UK, Bank of England Governor, Andrew Bailey stated that people should be positive about Britain’s economic prospects as it emerges from the COVID-19 pandemic but also realistic about the challenges from structural change.
In early trade on Tuesday, the euro has advanced against the US dollar to trade at $1.1922, while it has marginally weakened against the British pound to trade at GBP0.8632.