Vaccine rollout day 148 

New cases 21 584

By the close of trade on Thursday 1st July 2021, the South African rand weakened against the US dollar.  SA recorded the 3rd highest jump in covid-19 infections. The 24 hour recorded a jump of over 21584.  It’s been a big week for the Constitutional court.  Ramaphosa seems to be riding a wave as President Ramaphosa has never had it so good as now and that’s despite the ineffectual Covid-19 vaccination program, as the third wave of infections surge, a weakened economy and collapsing municipalities. This week the Constitutional Court neutered two of his biggest problems: Jacob Zuma and Busisiwe Mkhwebane.  The ANC’s national executive committee (NEC) meets this weekend and it has two weighty Constitutional Court judgments, which affect the party and its leaders, to consider.

  • In South Africa, the manufacturing sector’s recovery slowed for second consecutive month in June, with level 4 lockdown restrictions at the end of the month now posing a renewed threat.
  • Total vehicle sales fell in June.
  • In the US, ISM manufacturing activity expanded at a slightly decelerated pace in June.
  • Initial jobless claims fell more than expected last week, as layoffs plunged to a 21-year low in June, indicating towards a robust domestic labour market. The recent hawkish shift from the Fed has pushed the notion of a data-dependent approach to future policy moves, and data releases are playing an increasingly larger role in driving market moves. From an FX perspective, positive data surprises should benefit the dollar through the rate expectations channel, as further signs that the US economy is indeed overheating should fuel expectation of earlier action by the Fed. This data should set the tone for markets and the Fed’s rate expectations for the rest of July.
  • Two hours ago it looked like they were close to a deal. Now, as Bloomberg reports, there is talk of delaying the full ministerial meeting until later on Friday, or even later. As prices have risen along with oil demand, the incentives to stick together have weakened and the rifts are widening. the delay in the talks reveals the deep disagreements within OPEC+. Saudi Arabia, in particular, but also Russia have worked quite hard to present a unified front and reassure the market they are in control. The repeated last-minute clashes undermine the credibility of the cartel. And that uncertainty has sent crude prices lower.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.53%. Further, the yield on 2023 bond advanced to 5.29%, while that for the longer-dated 2030 issue rose to 8.94%.

In early trade on Friday 2nd July 2021, the US dollar is trading higher against the South African rand at R14.4826, while the euro is trading higher at R17.1536. The British pound has gained against the South African rand to trade at R19.9422.

By the close of trade on Thursday 1st July 2021, the euro advanced against most of the major currencies.

  • In the eurozone, manufacturing data climbed at a faster pace in June, amid easing in COVID-19 lockdown restrictions, which thus allowed factories to reopen. PMI survey data reveal how the UK’s manufacturers have underperformed their peers in the eurozone to the greatest extent for over two decades so far this year, coinciding with the end of the Brexit transition period. UK suppliers of components to other firms in particular have seen only a marginal increase in export sales, suggesting the UK is largely missing out on the recent surge in demand for inputs from the world’s factories. The eurozone, in contrast, has meanwhile seen record export growth of components.
  • In Germany, factory data rose more than market expectations.
  • The Bank of England Governor, Andrew Bailey stated that inflation is temporary, amid an economic recovery from the COVID-19 pandemic. The British pound continues to lose ground this week. In the North American session.  It has been a rough week for the pound, as GBP/USD has declined close to one percent. The pair has slipped to its lowest level since April 23.

In early trade on Friday 2nd July 2021, the euro slipped against the US dollar to trade at $1.1846, while it has weakened against the British pound to trade at GBP0.8632.

On the sports front, the Springboks take on Georgia tonight and South Africa’s biggest horse race the Vodacom July runs behind closed doors.  Can Do It Again run a hattrick?