Vaccine rollout day 51 / J & J VACCINE DAY 39 

By the close of trade on Tuesday 13rd March 2021, the South African rand weakened against the US dollar.

  • In the US, the Atlanta Federal Reserve (Fed) President, Raphael Bostic stated that the fiscal and monetary stimulus flowing through the US economy now may lead to an increase in prices and make inflation hard to gauge in coming months. Dallas Federal Reserve President Robert Kaplan said on Tuesday that he is among the policymakers expecting the central bank could start raising rates as soon as next year. As more people are vaccinated against the coronavirus and the economy continues to improve with the help of generous fiscal stimulus, including a $1.9 trillion aid package signed into law this month, Kaplan said he would be an early advocate for scaling back monetary support.
  • On Tuesday, the Suez Canal, one of the biggest waterways on the planet, had traffic clog up because a massive container ship (the Ever Given) got stuck. The 193-kilometre-long man-made passage connects the Red Sea and the Mediterranean. Trade goes both ways, but the waterway is commonly used by companies looking to take oil from the Middle East to North America/Europe. As of Tuesday afternoon (local time) tug boats were trying to clear the vessel so that the pileup of ships that have collected on both sides as a result can be on their way.
  • A U.S. official confirmed to ABC News Tuesday that North Korea fired two short-range missiles sometime Saturday and Sunday. The firing of the two missiles had been previously unreported. Senior Biden administration officials downplayed the launches as “normal activity” that was on the low end of the spectrum of provocations from North Korea.  Curiously, neither North Korea nor South Korea had acknowledged the firing of the two missiles as is routinely done by both countries.
  • Yesterday’s existing home sales and today’s new home sales data for February both showed substantial declines as the harsh mid-month winter storm and generally cold conditions across the country dampened buyer appetite. New home sales took the bigger hit, falling 18.2% month-on-month. New home sales are recorded at the point the purchase contract is signed so will have been directly affected by fewer buyers venturing out into the cold. The 6.6% decline in existing home sales, which are recorded as transactions when contracts are closed, would have been impacted by disruption to working practices.
  • In their testimony before the Congress, Fed Chairman, Jerome Powell and Treasury Secretary, Janet Yellen stated that they expect a strong economic rebound this year following the vaccine rollout. However, they emphasized that the US recovery is far from complete. Powell also stated that he doesn’t expect the $1.90tn stimulus package to lead to an unwelcome increase in inflation.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.44%. Further, the yield on 2023 bond advanced to 5.44%, while that for the longer-dated 2030 issue rose to 9.36%.

In early trade on Wednesday, the US dollar is trading marginally lower against the South African rand at R14.8946, while the euro is trading lower at R17.6527  The British pound has declined against the South African rand to trade at R20.4566.

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

  • On the global front, the UK, the European Union (EU), the US and Canada all imposed sanctions on senior Chinese officials involved in the mass internment of Uighur Muslims in China’s Xinjiang province. China swiftly retaliated against the EU, announcing its own blacklist of 10 individuals, including European lawmakers and four entities.
  • The boss of Treasury expects up to 150,000 Australians could lose work when JobKeeper ends on Sunday. New figures from the Australian Tax Office show there were more than one million employees still relying on the wage subsidy at the end of January. But Treasury secretary Steven Kennedy insists it is an appropriate time to end the program, telling a Senate Estimates hearing JobKeeper has “done its job” of propping up the economy during COVID-19 restrictions and assisting in the recovery.
  • As overall financial market conditions continue to improve in Canada, use of the Bank of Canada’s programs that were introduced in 2020 in response to the shock from COVID-19 to support the functioning of key Canadian financial markets, has declined significantly. Reflecting the continued improvement in the general functioning of Canadian financial markets, the Bank is announcing the discontinuation of the Commercial Paper Purchase Program (CPPP), the Provincial Bond Purchase Program (PBPP), and the Corporate Bond Purchase Program (CBPP) on their originally announced end date.

In early trade on Wednesday, the euro has marginally slipped against the US dollar to trade at $1.1866, while it has gained against the British pound to trade at GBP0.8622.