Vaccine rollout day 97 / J & J VACCINE DAY 92

By the close of trade on Friday 7th May 2021, the South African rand strengthened against the US dollar.

  • The Moody’s rating agency issued a brief statement saying that the South Africa was among several debt issuers whose rating was not updated on May 7 as per its calendar.
  • Friday was all about Payrolls with a disappointing print (266k vs. 1m expected) providing further ammunition for the Fed doves to keep policy ultra-accommodative. The weekend was all about digesting the implications with opinion divided on whether fiscal stimulus is acting as a disincentive for people to seek work, or whether a slower recovery in the labour market warrants more stimulus. Markets so far have taken it as supporting a lower for longer view with equities lifting to new record highs (S&P500 +0.7% on Friday and 1.2% for the week).
  • As China moves closer to rolling out the world’s first major sovereign digital currency, speculation over the global implications has reached a fever pitch. Historian Niall Ferguson is calling the digital yuan a “potentially fatal challenge” to decades of American financial hegemony. Franklin Templeton’s Michael Hasenstab says it could undermine the dollar’s role as the world’s reserve currency. Joe Biden’s White House is studying the potential threat to U.S. interests.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.25%. Further, the yield on 2023 bond declined to 4.64% while that for the longer-dated 2030 issue fell to 9.03%.

In early trade on Monday 10th May 2021, the US dollar is trading marginally higher against the South African rand at R14.0662, while the euro is trading lower at R17.0827.  The British pound has gained against the South African rand to trade at R19.7162.

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

  • Asian stock markets are mostly higher on Monday, following the broadly positive cues from Wall Street on Friday as surging commodity prices and weaker than expected US job growth in April allayed fears about higher inflation, interest rates and a cutback in stimulus. Asian markets closed mixed on Friday.
  • Prime Minister Boris Johnson has celebrated triumphant early local election results in England, though his attention is already turning to the vote in Scotland which is likely to signal a majority for pro-independence parties. Johnson’s ruling Conservatives tightened their grip on the pro-Brexit former industrial heartlands of northern England in results announced Friday. They took the parliamentary seat of Hartlepool, which overwhelmingly backed leaving the European Union, from the opposition Labour Party for the first time since the electoral district was created in 1974.
  • Seasonally adjusted German industrial production rose more than expected in March.
  • Exhilarated Spaniards chanting “freedom” danced in streets and partied on beaches as a COVID-19 curfew ended in most of the country, but others feared it was too soon to let go. In scenes akin to New Year’s Eve celebrations, hundreds of mainly young people gathered in Madrid’s Puerta del Sol square to applaud the clock striking midnight while in Barcelona revelers headed to the beach with drinks in hand. Some wore masks but there was scant social distancing as friends kissed, hugged, danced and sang.
  • Treasurer Josh Frydenberg has dashed any lingering hopes of renewed international travel or significant migration by the end of the year, saying Australia’s borders are expected to reopen in 2022. But skilled migrants will be the star of that eventual reopening, with the nation pinning its long-term hopes on a renewed influx of workers. Speaking to The Age ahead of Tuesday’s Federal Budget, Frydenberg said the international border, which was slammed shut in March last year in response to the coronavirus pandemic, will not open in any major capacity until “it’s safe to do so”.

In early trade on Monday 10th May 2021, the euro has slipped against the US dollar to trade at $1.2172, while it has weakened against the British pound to trade at GBP0.8642.