LOCKDOWN LEVEL 1 Ver3 [ DAY 2]  

TOTAL DAYS 371 – 7 HOURS 30 MINUTES

Vaccine rollout day 59 / J & J VACCINE DAY 47

 By the close of trade on Wednesday 31 March 2021, the South African rand strengthened against the US dollar.

  • In the US, pending home sales fell on a monthly basis in February, signaling a cooling in the housing market in the months ahead as accelerating prices amid tight supply and rising mortgage rates reduce affordability.
  • We should be seeing strong job gains in March and possibly some drop in the unemployment rate. The checks mostly went out after the reference week, but with infection rates dropping, more people are going to restaurants and traveling. Also, for better or worse, many state and local governments have relaxed pandemic restrictions. The effect of bad weather, which slowed job growth in February, will also be reversed with the country experiencing more typical March weather. The relief package also likely had some effect on state and local hiring, as governments could act knowing that the money was on the way
  • Meanwhile, US President, Joe Biden’s proposed $2.3 trillion spending package unveiled March 31 should have come a day later, as an April Fool’s exercise. Labeled an infrastructure package, it offers just $447 billion for transportation infrastructure over eight years. That’s less than a quarter of the most widely accepted estimates for the US infrastructure deficit. On February 21, Biden told a group of US senators, “If we don’t get moving, [the Chinese] are going to eat our lunch.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.47%. Further, the yield on 2023 bond declined to 5.29%, while that for the longer-dated 2030 issue fell to 9.48%.

In early trade on Thursday, the US dollar is trading higher against the South African rand at R14.7922, while the euro is trading higher at R17.3466.   The British pound has gained against the South African rand to trade at R20.4027.

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

  • In the eurozone, inflation jumped on an annual basis in March.  The European Central Bank may become trapped in a disruptive pincer movement as a result of four disparate German court challenges to vital elements of Germany’s European policies. The litigation at the constitutional court in Karlsruhe could, in extreme circumstances, upset the European Union’s plans for a ground-breaking €750bn borrowing programme, starting this summer, and the ECB’s possible autumn extension of its €1.85tn emergency asset purchases. The lawsuits signal a new phase of intensity in a 30-year jurisdictional tussle over European integration.
  • German unemployment fell in March, as lockdown measures to curb the coronavirus in Europe’s biggest economy had a limited effect on the labour market.
  • The British economy grew more quickly than previously thought in the final three months of last year but still shrank by the most in more than three centuries in 2020 as a whole.
  • French President, Emmanuel Macron put his country into a third lockdown and said schools would close for three weeks to cope with a third wave of COVID-19 infections that threatens to overwhelm hospitals.
  • Canada’s Ontario is to go into lockdown from this Saturday for 28 days.  The Canadian Dollar outperformed other major currencies on Wednesday and remained leader of the pack for 2021 after Statistics Canada data showed the economy gaining momentum in January despite a second wave of coronavirus infections and associated restrictions on activity. Canadian GDP rose by 0.7% in the opening month of the year, up from 0.1% in the closing quarter of 2020 and ahead of a consensus that had looked for a 0.5% increase, with coronavirus-related losses in retail, accommodation and food services more than offset by gains elsewhere.
  • Japanese manufacturers signalled a second successive improvement in operating conditions in March. Survey respondents registered quicker expansions in production and new order volumes, with the fastest growth rates in 27 and 35 months respectively. At the same time, businesses reported that employment had stabilised for the first time in three months as manufacturers required additional capacity in order to meet rising order volumes. As a result, firms in the Japanese manufacturing sector remained optimistic of a rise in output over the coming 12 months.

In early trade on Thursday, the euro has marginally slipped against the US dollar to trade at $1.1733, while it has weakened against the British pound to trade at GBP0.8556.

COVID-19 SNAPSHOT