Vaccine rollout day 98 / J & J VACCINE DAY 93 [Phase 1]

By the close of trade on Monday 10th May 2021, the South African rand strengthened against the US dollar.

  • On Friday, Moody’s left its sovereign ratings unchanged, while an improving local political environment and the global market risk-on sentiment provided further support.
  • What started off as a strong day for risk appetite turned into losses for currencies and equities. The Dow Jones Industrial Average and NASDAQ hit record highs at the start of New York trade but peaked shortly after, shedding their gains to end the day lower. Currencies tumbled as well but reversed before stocks as traders lost confidence in the risk on rally. With no major economic reports to trigger today’s reversal, it was a typical exhaustion move.
  • The Federal Reserve has broken with its previous approach to monetary policy to an extent that few people realize. When the Fed announced its new monetary policy strategy in August 2020, the announcement failed to make much news. The new strategy appeared to involve minor tweaks: Moving from an inflation target of 2 percent to an “average inflation target” of 2 percent, and switching from focusing on “shortfalls” from maximum employment to focusing on “deviations” from maximum employment.
  • Global business surveys indicated a marked upturn in hiring in April as companies boosted activity in line with resurgent demand for goods and services. As such, the data point to a substantial improvement in official labour market data in coming months. Surging demand drives jobs boom: Global PMI data, compiled on behalf of JPMorgan by IHS Markit from its proprietary business surveys of over 28,000 companies in more than 40 countries, recorded the largest influx of new business into businesses since April 2010 at the start of the second quarter.
  • A major Cyber attack on the prime fuel line that feeds the USA struck yesterday.  The President continues to be regularly briefed on the Colonial Pipeline incident. The Administration is continually assessing the impact of this ongoing incident on fuel supply for the East Coast. We are monitoring supply shortages in parts of the Southeast and are evaluating every action the Administration can take to mitigate the impact as much as possible. The President has directed agencies across the Federal Government to bring their resources to bear to help alleviate shortages where they may occur.
  • IRGCN fast boats had unsafe and unprofessional interaction with US military vessels in Strait of Hormuz- Pentagon. About 30 warning shots were fired by U.S. Coast Guard vessel before IRGCN vessels left
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.23%. Further, the yield on 2023 bond declined to 4.64%, while that for the longer-dated 2030 issue fell to 8.96%.

In early trade on Tuesday, the US dollar is trading higher against the South African rand at R14.0672, while the euro is trading higher at R17.0836.    The British pound has gained against the South African rand to trade at R19.8732.

By the close of trade on Monday 10th May 2021, the euro declined against most of the major currencies.

  • It’s the facility that’s meant to help European countries recover from the Covid-19 crisis. €672.5bn of grants and loans are available and countries have been submitting their plans. But that take-up, at least so far is modest at best. Only 14 out of a possible 27 proposals have come in. Like you would do when hosting an unsuccessful party, you extend the deadline for applications a bit to make sure you fill the room. That’s what the Commission has done as it has made the deadline flexible.
  • Investor morale in the eurozone rose in May to its highest level since March 2018, on all-time high expectations and an upbeat evaluation of the current situation, suggesting the bloc is overcoming from the COVID-19 crisis.
  • The UK lowered the Alert Level for the coronavirus to Level 3 from Level 4. This means that “the epidemic is in general circulation”. The level 4 alert included “transmission is higher or rising exponentially”. Now that the level dropped, PM Johnson has the green light to ease more restrictions (set for next week), such as allowing restaurants to serve indoors. Last week, the Bank of England announced that they were going to keep monetary policy unchanged, but they also said they would slow the pace of bond buying to 3.4 billion Pounds 4.4 billion Pounds a week.
  • Store closures and job losses are a threat to Britain’s retail sector despite an increase in activity following the easing of lockdown restrictions, the government has been warned by the industry’s trade body. The British Retail Consortium said a pick-up in April as non-essential stores reopened should not be seen as evidence of full recovery and urged ministers to make good on their promises of reform to business rates. The BRC’s monthly update reported that in the final three weeks of last month, non-food sales were up by about 25% when compared with the levels of spending seen in March.

In early trade on Tuesday, the euro has advanced against the US dollar to trade at $1.2172, while it has gained against the British pound to trade at GBP0.8632.