Vaccine rollout day 46 / J & J VACCINE DAY 34   

By the close of trade yesterday 18th March 2021, the South African rand weakened against the US dollar.  In South Africa the longest reigning Zulu Monarch was “planted” and shortly thereafter the official funeral ceremony was held at the Nongoma Palace.  This memorial was attended by mourners from far and wide and most notably her Serine Highness Princess Charlene of Monaco was seated behind President Ramaphosa.  The Zulu nation now awaits a successor.

  • In the US, the number of people filing new claims for unemployment benefits unexpectedly rose for the week ended 12 March. However, the domestic labour market is regaining its footing as an acceleration in the pace of vaccinations leads to more businesses reopening.
  • The U.S. dollar traded higher against all of the major currencies on Thursday, erasing most of its post FOMC losses. The Federal Reserve has no plans to raise interest rates until 2023 but the recovery in the dollar and rise in Treasury yields tell us that investors continue to be drawn to the economy’s positive outlook. Today’s strong rise in the Philadelphia Fed index reinforces the central bank’s upgraded economic projections. The Philly Fed measure jumped from 23.3 to 51.8, its best reading in 48 years.
  • China and the US, the two biggest major powers in the world that have been at loggerheads, are set to kick off a high-level meeting in Alaska after a series of contests and frictions. The atmosphere before the talks is not friendly at all since the US has launched a new round of provocations and offensives against China, such as announcing new sanctions against Chinese officials regarding Hong Kong’s electoral reform, an internal affair of China.
  • In South Africa, the vaccine rollout has showed just how challenging the process is.  South Africa had hoped to have had near 1million doses administered but we are just slightly over the 150,000 mark.  Availability and a solid plan seem to be the main frustrations.
  • The minster of energy yesterday announced that the Turkish-based Karpowership company scored a ‘get out of jail free’ card from the South African government in 2020 after successfully persuading a senior environmental affairs official to exempt it from conducting a mandatory environmental impact assessment apparently on the basis that extra electricity supplies were needed desperately due to the Covid-19 crisis.  Karpowership is one of several private companies announced as preferred bidders for contracts to supply up to 2,000MW of “emergency electricity” supplies to Eskom, through a bid process advertised by the Department of Minerals Resources and Energy (DMRE).
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond fell to 7.40%. Further, the yield on 2023 bond advanced to 5.34% while that for the longer-dated 2030 issue rose to 9.43%.

In early trade on Friday, the US dollar is trading lower against the South African rand at R14.7422, while the euro is trading lower at R17.5656.   The British pound has declined against the South African rand to trade at R20.5266.

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

  • The European Central Bank President, Christine Lagarde stated that the central bank will not respond to inflation blips, as prices rise in the euro area.
  • The Bank of England delivered a slightly more upbeat assessment of the U.K. economy, sidestepping an opportunity to cool a surge a market interest rates. The central bank’s Monetary Policy Committee left the pace of its stimulus unchanged as expected, noting economic output fell less than anticipated in January while governments in the U.K. and U.S. both outlined plans for new spending. Minutes of the meeting mentioned “upside” risks seven times, up from two in February. The decision indicated that the BOE led by Governor Andrew Bailey is tolerating a surge in bond yields around the globe
  • The Bank of Japan will unveil on Friday a raft of measures to loosen control over asset price moves and make its ultra-easy policy more sustainable, as the economic damage wrought by the coronavirus pandemic prolongs its battle to fire up inflation. The outcome of the policy review, to be announced after a two-day meeting ending on Friday, will be more a fine-tuning of the BOJ’s tools rather than on overhaul of its strategy that has failed to accelerate consumer price growth to its 2% target.
  • The European Medicines Agency has ruled that the AstraZeneca coronavirus vaccine is safe, despite some concerns over possible side effects. The announcement Thursday comes after more than a dozen EU nations decided to halt the use of the AstraZeneca shot, which was developed with the University of Oxford, after reports of blood clots. A few other countries have stopped using individual batches of the vaccine. The response was not uniform across the 27 member states of the European Union, however, with a number of nations continuing to deploy the AstraZeneca shot in their vaccination campaigns.

In early trade on Friday, the euro marginally slipped against the US dollar to trade at $1.1922, while it has gained against the British pound to trade at GBP0.8572.