Vaccine rollout day 71 / J & J VACCINE DAY 59 [SUSPENDED DAY 1]

By the close of trade on Tuesday 13th April 2021, the South African rand strengthened against the US dollar.  In South Africa confusion abounds as the Health Minister announced that the J&J vaccine had been placed on hold.  South Africa has up to now only administered 292 263 vaccines with no public announcement on vaccine registrations or program forthcoming.  This announcement followed on the heels of the US suspending J&J vaccines after 6 people had died after taking the vaccine.

  • In SA data released in mining, showed that production was better than expected in February, posting a first annual gain in a year as double-digit increases in the output of iron and manganese ore, as well as other non-metallic minerals, boosted the mining sector.
  • In the US, the consumer price index (CPI) rose by the most in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation. A gauge of global equity markets rose to record highs on Tuesday, led by surging technology-related stocks, as Treasury bond yields eased after U.S. consumer price data for March showed the pace of inflation was not rising wildly. The consumer price index rose 0.6%, the biggest increase since August 2012, as rising vaccinations and fiscal stimulus unleashed pent-up demand. But the data is unlikely to change Federal Reserve Chair Jerome Powell’s view that higher inflation in coming months will be transitory.
  • The pace of consumer inflation is likely to have returned to pre-pandemic levels in March, and it is expected to heat up even more in the next couple of months. Rising inflation is one of the biggest fears in the market, and if it gets too hot, it could corrode asset values, limit buying power and eat away at corporate margins.
  • Airport traffic is rebounding off of pandemic troughs in most countries, though Fitch Ratings’ latest quarterly Global Airport Tracker report says the proverbial runway to normal will not be in sight for years. Now reflecting a one- to two-year delay since its last report, Fitch now forecasts recovery estimates ranging anywhere from 4Q’23 to 2025 before airport traffic returns to 2019 levels. The obvious variable is new COVID-19 variants and surges in the number of cases, which caused additional or prolonged lockdown measures and could linger as vaccine roll outs remain slow and uneven on a global basis.
  • Billionaires like Bill Gates have long said that they, theoretically, would be in favor of paying much more money in personal taxes. And yet Gates and some of the wealthiest people in the world are staying silent on a series of active proposals that would do just that, sidestepping a legislative package in their home state of Washington that targets them specifically. Washington is home to four of the richest people on the planet: Gates, Amazon founder Jeff Bezos, Bezos’s ex-wife novelist MacKenzie Scott, and longtime Microsoft CEO Steve Ballmer.
  • China is taking more direct steps to mend relations with U.S. investors, ramping up its communication with businesses in an environment of heightened economic tensions between the two nations. Officials from the National Development and Reform Commission, the government’s top economic planning body, met Tuesday with representatives of companies like Tesla Inc., Qualcomm Inc. and Dell Technologies Inc. the first of possibly more similar meetings planned with U.S. firms.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.46%. Further, the yield on 2023 bond declined to 5.12% while that for the longer-dated 2030 issue rose to 9.34%.

In early trade on Wednesday, the US dollar is trading lower against the South African rand at R14.4954, while the euro is trading lower at R17.3732.  The British pound has marginally declined against the South African rand to trade at R19.9572.

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

  • Investor sentiment in Germany fell unexpectedly in April, citing rising fears that private consumption could be depressed as Europe’s largest economy gets closer to extending lockdown measures.
  • In the UK, Gross Domestic Product (GDP) rose less than expected on a monthly basis in February, showing a partial recovery in post-Brexit trade with the European Union.
  • Japan’s core machinery orders unexpectedly fell the most in about a year in February, government data showed, dashing hopes for a pick-up in capital expenditure needed for a private sector-led recovery from the coronavirus-induced slump. Policymakers are counting on companies to spend their huge cash piles on investment in plant and equipment and wage hikes to help pull the world’s third-largest economy out of deflation and stagnation.

In early trade on Wednesday, the euro has advanced against the US dollar to trade at $1.1972, while it has marginally gained against the British pound to trade at GBP0.8722.