LOCKDOWN LEVEL 1 Ver3 [ DAY 43]  

TOTAL DAYS 412 – 7 HOURS 25 MINUTES

Vaccine rollout day 99 / J & J VACCINE DAY 94 [Phase 1]

By the close of trade on Tuesday 11th May 2021, the South African rand strengthened against the US dollar.

  • The group behind the ransomware that took down Colonial Pipeline late last week has apologized for the “social consequences,” claiming that its goal is to make money, not cause societal problems. The group is called DarkSide, and the FBI has confirmed that the group’s malware was responsible for compromising one of the US’s largest fuel pipelines. According to Vice, the group’s apology was posted to its dark web site. It reads: We are apolitical, we do not participate in geopolitics, do not need to tie us with a defined government and look for other our motives. Our goal is to make money.
  • The manufacturing sector showed recovery in March, rising at its fastest pace in almost two years, as COVID-19 second-wave lockdown conditions eased and thus providing a minor first-quarter bump for the economy.
  • In the US, New York Federal Reserve (Fed) Bank President, John Williams stated that the Libor benchmark is unreliable, and the market volatility seen at the start of the pandemic is evidence that funding markets based on the rate can crumble under stress.
  • On the data front, job openings popped to a record high in March, as employers struggled to find workers to fill those positions.  Business owners from coast to coast say they can’t find enough workers willing to come back to work, President Biden on Monday said he wants to make sure people offered a job either take it or lose the generous COVID-19 unemployment benefits. “The law is clear: if you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting the unemployment benefits,” Biden said at the White House. “No one should be allowed to game the system and we will insist that the law is followed.”
  • A 13-storey residential block in the Gaza Strip collapsed on Tuesday night after being hit by an Israeli air strike, witnesses said. Video footage showed three plumes of thick, black smoke rising from the tower, its upper stories still intact as they fell. The tower houses an office used by the political leadership of Gaza’s Islamist rulers, Hamas. Electricity in the area around the building went out, and residents were using flashlights. Shortly after the attack, Hamas and the Islamic Jihad group said they would respond by firing rockets at Tel Aviv. Air raid sirens and explosions were heard around the city.  Hamas claim to have fired over 100 rockets at Tel Aviv.   The UN Security Council will hold an urgent meeting on Wednesday over the deadly unrest playing out between Israel and the Palestinians, its second such session in three days, diplomatic sources said Tuesday. The closed-door meeting has been requested by Tunisia, Norway and China. The first, held Monday, ended without a joint statement, with the United States expressing reluctance to adopt a draft statement proposed by Norway “at this point.” The text, seen by AFP, would call on Israel to “cease settlement activities, demolitions and evictions” including in east Jerusalem.
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.30%. Further, the yield on 2023 bond advanced to 4.72%, while that for the longer-dated 2030 issue fell to 8.96%.

In early morning trade on Wednesday, the US dollar is trading higher against the South African rand at R14.0432, while the euro is trading marginally higher at R17.0072.   The British pound has marginally declined against the South African rand to trade at R19.7948.

By the close of trade on Tuesday 11th May 2021, the euro declined against most of the major currencies.

  • Data indicated that German investor sentiment surged to its highest level in May, since the start of the COVID-19 pandemic, pointing to a significant upswing in Europe’s largest economy in the coming six months. A separate gauge of current conditions rose from the prior month.
  • China released both CPI and PPI data earlier and the results point to worries that inflation may pick up faster than expected. China’s YoY CPI print was 0.9% vs 0.4% in March. This is the highest reading since September 2020. This big gainer in the CPI data was transportation and communication, which was 4.9% vs 2.7% in March. Pork prices continued to decline, -21.4% vs -18.4% last. The MoM headline reading was -0.3% vs -0.5% in March. PPI is a measure of producer prices. It tells what businesses are paying for materials they use to make their products.
  • Something took place on Tuesday that has happened just once since 2016: Japan’s Topix index (which is widely viewed as more representative of Japanese equities than the Nikkei) tumbled by 2% in the morning session and the BOJ did not intervene. Why is this notable? Because  in a world where everyone is now completely used to Plunge Protection Teams and central bank bailouts as if it is a perfectly expected event this was only the second time since at least 2016 that the Bank of Japan did not make an ETF purchase after the Topix fell more than 1% in the morning session.

In early trade on Wednesday 12th May 2021, the euro has slipped against the US dollar to trade at $1.2132, while it has marginally gained against the British pound to trade at GBP0.8597.