Vaccine rollout day 43 / J & J VACCINE DAY 31    

By the close of trade on Monday 15th March 2021, the South African rand strengthened against the US dollar.

  • US Treasury yields backed off recent highs, supporting a risk-on backdrop, with investors awaiting further policy cues from the Federal Reserve’s (Fed) policy meeting this week.
  • In the US, the Empire State Manufacturing Index rose to the highest level in 8 months in March.
  • Japanese and U.S. foreign and defense ministers are set to closely coordinate on steps to strengthen the bilateral alliance at security talks Tuesday in Tokyo as China puts forth increasingly coercive measures across the Indo-Pacific region. U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin are in Japan for the first Cabinet-level overseas trip under President Joe Biden’s administration, looking to work with Tokyo in addressing China, which Washington describes as “the biggest geopolitical test of the 21st century.”
  • For the past year, Federal Reserve Chair Jerome Powell has expressed a wish for more rescue spending from Congress, better control of the viral pandemic and clear evidence of an improving economy. He’s finally getting all three. Yet all of that hardly makes Powell’s job easier. At the Fed’s policy meeting this week and at a news conference to follow, the chair will take up a new challenge: Convincing financial markets that even as the economic picture brightens, the Fed will be able to continue providing support without contributing to high inflation.
  •  President Joe Biden is planning the first major federal tax hike since 1993 to help pay for the long-term economic program designed as a follow-up to his pandemic-relief bill, according to people familiar with the matter. Unlike the US$1.9 trillion COVID-19 stimulus act, the next initiative, which is expected to be even bigger, won’t rely just on government debt as a funding source. While it’s been increasingly clear that tax hikes will be a component Treasury Secretary Janet Yellen has said at least part of the next bill will have to be paid for, and pointed to higher rates.
  • 7 rockets target Iraq base housing US troops.  5 land in the base. No casualties reported. This is a developing story.
  • Locally, load-shedding continues to put pressure on business operations after power utility firm, Eskom announced that stage 2 load-shedding.  The State capture inquiry submitted their Heads of Argument to the constitutional Court.   In a hard hitting submission the commission papers were adamant that Zuma should go to court over his “malicious” defiance of the constitutional court.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.44%. Further, the yield on 2023 bond declined to 5.32% while that for the longer-dated 2030 issue fell to 9.27%.

In early trade on Tuesday, the US dollar is trading marginally lower against the South African rand at R14.8622, while the euro is trading marginally lower at R17.7327.  The British pound has declined against the South African rand to trade at R20.6155.

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

  • Meanwhile, Germany, France [Macron confirms France will be suspending AstraZeneca for public use until further EMA guidance], Italy and Spain became the latest countries to suspend the use of AstraZeneca’s COVID-19 vaccine over reports of dangerous blood clots in some recipients, though the company and European regulators have said there is no evidence the shot is to blame.
  • Today, the European Commission adopted the first strategic plan for Horizon Europe, the new EU research and innovation programme worth €95.5 billion in current prices. The strategic plan is a novelty in Horizon Europe and sets the strategic orientations for the targeting of investments in the program’s first four years. It ensures that EU research and innovation actions contribute to EU priorities, including a climate-neutral and green Europe, a Europe fit for the digital age, and an economy that works for people.

In early trade on Tuesday, the euro marginally advanced against the US dollar to trade at $1.1966, while it has gained against the British pound to trade at GBP0.8627.