LOCKDOWN LEVEL 1 Ver3 [ DAY 38]  

TOTAL DAYS 407 – 7 HOURS 40 MINUTES

Vaccine rollout day 94 / J & J VACCINE DAY 82

By the close of trade on Thursday 6th May 2021, the South African rand strengthened against the US dollar.  In SA the knives have come out as two factions set at each other under the step aside rule.  Chief Justice Mogoeng Mogoeng is placed on long leave by President Ramaphosa, he is replaced by the first female Judge President.  In northern KZN the Zulu Queen Regent was “planted” with an official Category 2 State funeral to commence later today.

  • In the US, the number of people filing new claims for unemployment benefits fell below 500,000 for the week ended 30 April, for the first since the COVID-19 pandemic started more than a year ago, signaling that the labour market recovery had entered a new phase amid a booming US economy.
  • Less than a week after Dalla Fed president and Former Goldman partner, Robert Kaplan sparked a selloff in markets when he pointed out the obvious saying that “we have real excesses in the housing market” and said that rates should start rising in 2022, moments ago he sparked another dump in stocks when after several days of carefully worded statement by Fed officials, the non-voter expressed his desire for tapering to start soon, saying “the Fed should start the taper debate sooner rather than later.”
  • Nonfarm productivity rebounded in the 1Q21, depressing labour costs growth, but the data has been severely distorted by the COVID-19 pandemic to provide a clear trend.
  • Job growth in April could top 1 million, though many positions also may have gone unfilled. Economists expect to see job creation in each of the next several months of over 1 million, as more Americans are vaccinated and the economy booms. According to Dow Jones, economists expect 1 million jobs were added in April, and the unemployment rate fell to 5.8% from 6% in March.
  • April PMI data signalled a sharp expansion of Chinese service sector business activity, that was supported by the strongest rise in overall new work for five months. In order to meet rising customer demand businesses increased their staff numbers at a faster rate, which helped to alleviate pressure on capacity. Input costs meanwhile rose solidly, which prompted firms to raise their prices charged again. Although easing from March’s recent record, optimism around the 12-month business outlook remained marked, partly driven by expectations that business conditions at home and abroad will continue to recover.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.29%. Further, the yield on 2023 bond declined to 4.65%, while that for the longer-dated 2030 issue fell to 9.06%.

In early trade on Friday 7th May 2021, the US dollar is trading marginally lower against the South African rand at R14.2093, while the euro is trading marginally higher at R17.1448.  The British pound has gained against the South African rand to trade at R19.7627.

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

  • Trade Minister Dan Tehan has expressed disappointment over the downward spiral in diplomatic relations with China. Beijing has indefinitely suspended all contact under the China-Australia Strategic Economic Dialogue. It is the latest move in a long-running feud and will make already strained diplomatic relations even harder to repair. “We want to have a dialogue with China, we want to be able to work through our differences,” Mr. Tehan told Seven on Friday. “We have a very important economic relationship, which has helped both counties.
  • The eurozone retail sales rose by more than expected in March, pointing to pent-up consumer demand as COVID-19 pandemic lockdowns ease.
  • German factory orders rose in March, signaling that manufacturers will support a recovery once supply and delivery bottlenecks are overcome.
  • In the UK, the BoE kept its benchmark interest rate at an all-time low and the size of its bond-buying programme unchanged at GBP895.00bn ($1.24tn). It upgraded its 2021 growth outlook for the British economy slightly above analyst expectations.
  • Japan’s services sector activity contracted in April as coronavirus emergency measures hit businesses, though the pace of decline eased to its slowest since around the time the health crisis started in early 2020. Firms faced challenges over the short-term outlook as Prime Minister Yoshihide Suga’s government considers extending a state of emergency in Tokyo and other major areas beyond May 11, which could cast doubt on the planned Summer Olympics.

In early trade on Friday 7th May 2021, the euro has marginally advanced against the US dollar to trade at $1.2068, while it has weakened against the British pound to trade at GBP0.8682.