Vaccine rollout day 108 / J & J VACCINE DAY 101 [Phase 2]

By the close of trade on Thursday, the South African rand strengthened against the US dollar.  Israel implements an Egyptian brokered cease fire over Gaza.  The ceasefire is unconditional.

In rugby the Springboks are back in the Rugby Championship [For Now].The Springboks will face Argentina before departing for a four match tour of Australia and then Five match tour of New Zealand.  The Rugby Championship will be a 12 match tournament.

  • The SARB’s MPC kept support for a domestic economic recovery in place, leaving lending rates unchanged for a fifth meeting in a row. However, it indicated that upside inflation risks were beginning to emerge.
  • US initial jobless claims continue to edge lower, coming in at 444,000 last week versus 478,0000 the week of May 7th. The consensus had been looking for 450,000 so a modest positive surprise, yet continuing claims actually rose to 3.751mn versus 3.64mn the week before. In a topsy turvy report we also see that the total number of people claiming any form of unemployment benefit fell to 15.976mn from 16.862mn. This still hints at some ongoing stress, especially when we remember back to pre-pandemic norms when initial claims were typically in the 200,000-250,000 range.
  • The Philadelphia Fed Manufacturing Index slowed down in May after hitting its highest pace in nearly half a century earlier this spring.
  • The Bank of Canada warned household debt vulnerabilities are intensifying amid a surge in housing prices that’s being driven in part by speculative activity. In its annual Financial System Review, the Ottawa-based central bank said Thursday there are signs people are buying houses in some regions of the country with the expectation prices will continue to rise, which creates unsustainable dynamics. High home prices across the country, meanwhile, have led many households to take on larger mortgages relative to their income, putting them in a precarious situation should the economy take a downward turn.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.34%. Further, the yield on 2023 bond declined to 4.84% while that for the longer-dated 2030 issue fell to 9.03%.

In early trade on Friday 21st May 2021, the US dollar is trading higher against the South African rand at R14.0012, while the euro is trading higher at R17.1262.  The British pound has gained against the South African rand to trade at R19.8526.

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

  • Consumer sentiment in the U.K. increased further in May amid the easing of virus-related restrictions, regaining all the ground lost to the pandemic. Market-research firm GfK’s consumer-confidence barometer came in at minus 9 in May, up six points from April and matching the reading registered in March 2020, before confidence among British consumers plunged amid the virus-related lockdown. After months at severely depressed levels, British consumers’ mood improved quickly from February amid a swift Covid-19 vaccination campaign and the gradual implementation of the roadmap out of lockdown.
  • Meanwhile, German producer price index (PPI) rose on an annual basis in April, the biggest increase in nearly a decade, in a further sign that supply bottlenecks are leading to increased inflation pressure in Europe’s largest economy.
  • Japan’s core consumer prices fell for the eighth straight month in March and analysts expect further drops ahead due to the drag from cellphone fee cuts, keeping the central bank under pressure to maintain its massive stimulus to fire up inflation. A spike in new COVID-19 infections and the government’s plan to declare a third state of emergency from Sunday may also weigh on inflation by hitting already weak consumption, boding ill for a fragile economic recovery. The nationwide core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, slid 0.1% in March
  • Australia’s relentless recovery struck an air pocket as household sentiment retreated and employment fell for the first time in seven months, which combined with a slow vaccine roll out increases pressure on the central bank to maintain a high tempo of stimulus. Consumer confidence slid 4.8% in May, though from a record high, and employers cut 30,600 roles in April. Yet other indicators remain positive, a survey showed the financial well-being of Australians climbed to the highest ever and last week’s budget contained new rounds of spending.

In early trade on Friday, the euro marginally advanced against the US dollar to trade at $1.2262, while it has gained against the British pound to trade at GBP0.8672.