Vaccine rollout day 58 / J & J VACCINE DAY 46

By the close of trade on Tuesday 30th March 2021, the South African rand weakened against the US dollar.  Here in SA President Ramaphosa addressed the nation and in essence tweaked the level 1 restrictions by closing Off Consumption [Bottle stores] between 5pm on Thursday and 09h00 on Tuesday. Restrictions in numbers gathering have been relaxed but to no more than 250 people indoor and 500 people outdoor.

  • Portugal has sent troops to Northern Mozambique to combat the Al Shabab fighters.
  • In the US, consumer confidence raced in March to its highest level since the start of the COVID-19 pandemic, thus supporting views that domestic economic growth will accelerate in the coming months, driven by more fiscal stimulus and an improving public health situation.
  • Less equity turmoil than feared: The contagion from block trades linked to Archegos Capital Management stock exposure was likely more contained than feared, leaving the broad equity segment capable of holding on to recent gains yesterday and during the Asian session today. This is set to remain a key thread under investors’ watch today as the data calendar in major economies looks rather dull. In the US, two Federal Reserve speakers (John Williams and Randal Quarles) should not attract much interest. The key event of the week is set to be the unveiling by President Biden of his infrastructure plan
  • Efforts to sketch out initial U.S. and Iranian steps to resume compliance with the 2015 nuclear deal have stalled and Western officials believe Iran may now wish to discuss a wider road map to revive the pact, something Washington is willing to do. U.S. President Joe Biden’s aides initially believed Iran, with which they have not had direct discussions, wanted to talk about first steps toward a revival of the agreement that Biden’s predecessor, Donald Trump, abandoned in 2018.
  • Marine traffic resumed in Suez Canal reducing uncertainty in the markets, with the USD firming its position while long-dated Treasuries sell-off gained momentum ahead of Biden’s presentation of infrastructure spending plan. Oil clang to recent gains ahead of the OPEC meeting. On Thursday, OPEC will decide whether to extend current output cuts after May 1. At the last meeting, OPEC took it by surprise leaving productions cuts unchanged, which, however, played a cruel joke: the market regarded this as a signal of concern about demand outlook. Prices jumped up, but unwound gains quickly.  In SA we have been warned of a record price fuel jump at the pumps following the Easter weekend.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.52%. Further, the yield on 2023 bond advanced to 5.37%, while that for the longer-dated 2030 issue rose to 9.52%.

In early trade on Wednesday, the US dollar is trading higher against the South African rand at R14.9422 while the euro is trading higher at R17.4766.  The British pound has marginally gained against the South African rand to trade at R20.4996.

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

  • German consumer price index (CPI) accelerated in March to surpass the European Central Bank’s target of close to but below 2.0%.
  • Meanwhile, in the eurozone, economic confidence jumped to a one-year high in March, with industrial firms, services companies and consumers all reporting more optimism about the future.
  • Japan’s industrial output fell in February due to declines in the production of cars and electrical machinery, in a worrying sign for an economy struggling to recover from the deep impact of the coronavirus pandemic. The world’s third-largest economy is expected to contract in the current quarter due to a second coronavirus-related state of emergency that was imposed from early January for Tokyo and some neighboring prefectures. Official data released on Wednesday showed factory output shrank 2.1% from the previous month in February, dragged down by falls in production of cars, electrical machinery.   International Monetary Fund chief Kristalina Georgieva said Tuesday that Japan’s economic recovery will not be derailed by staging the Tokyo Olympics without overseas spectators, while hailing the country’s “strong response” to mitigate the fallout from the coronavirus pandemic through timely stimulus packages. “In terms of economic impact (from the absence of overseas fans), it would be very minor. We’ve done some calculations and we concluded that it is not going to harm the Japanese recovery,” the IMF managing director said in an online interview with Kyodo News.
  • Sydney home prices surged 3.6 per cent in March, the fastest monthly rise in 33 years, as buyers raced to take advantage of low interest rates and government incentives. The last time Sydney hit more than 3 per cent monthly growth was in August 1988 when it surged 3.8 per cent, according to CoreLogic. The CoreLogic March Index set to be released on Thursday is also likely to show Melbourne dwelling prices jumping 2.2 per cent, Brisbane 2.4 per cent, Adelaide 1.4 per cent and Perth 1.7 per cent. The five capital city aggregate is likely to rise 2.8 per cent or an annualised growth of 33 per cent.

In early trade on Wednesday, the euro has slipped against the US dollar to trade at $1.1766, while it has marginally gained against the British pound to trade at GBP0.8542.