Vaccine rollout day 154 

New cases 15501

Single day deaths 457

By the close of trade on Tuesday, the Rand weakened against the US Dollar.  At home the political drama moved to the Pietermaritzburg High Court where Zuma’s lawyers are arguing that the court has jurisdiction and that the Judge should stay the arrest warrant that comes directs Zuma to hand himself over to the police or the Minister of Police together with the Police Commissioner to effect his arrest.  The highly contagious Delta variant of Covid-19 has fast become the dominant strain around the world, spreading beyond Asia. Countries with low vaccination rates like South Africa and Australia have had no choice but to reimpose draconian lockdowns, but in other places such as America and Britain where most adults have had at least one vaccine dose, there are no plans yet to pause the full reopening of their economies. On the contrary Britain is set to fully restart on July 19th 2021

  • Economic activity in the services sector grew in June for the 13th month in a row, say the nation’s purchasing and supply executives in the latest Services ISM Report On Business. The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM0) Services Business Survey Committee: “The Services PMI registered 60.1 percent, which is 3.9 percentage points lower than May’s all-time high reading of 64 percent.  The pace of US recovery picked up in June, adding 850,000 jobs and narrowing the gap between the labor market and normality. At the same time, the official unemployment rate edged up to 5.9 percent, while the realistic rate adjusted to account for misclassification and the unusually large drop in labor force participation during the pandemic was flat. Rebuilding a complex economy, which remains 9 million jobs short of its pre-pandemic trend, is no easy task. In recent months, job growth has been constrained by the lower-than-expected rate of unemployed workers transitioning into jobs.
  • Russia Wealth Fund cuts USD reserves to 0.
  • After years of trying to make it in cities, China’s migrant workers are returning home. An aging population, high living costs and new businesses like livestreaming e-commerce are contributing to the reversal of a rush to big cities that has defined China’s economic expansion over the last few decades. Millions of Chinese people did not go back to urban areas for work after the coronavirus pandemic last year, official data show. As of the end of March, the statistics bureau said there were still 2.46 million fewer migrant workers than the same period in 2019.
  • Yesterday, the South African rand weakened against the US dollar. In the US, service sector activity eased in June compared with that in the previous month. Meanwhile, the ISM reported that the US service sector rose moderately in June, likely restrained by labour and raw material shortages.
  • The single biggest ransomware attack yet, continued to bite Monday as more details emerged on how a Russia-linked gang breached the exploited software company. The criminals essentially used a tool that helps protect against malware to spread it globally. Thousands of organizations largely firms that remotely manage the IT infrastructure of others were infected in at least 17 countries in Friday’s assault. Kaseya, whose product was exploited, said Monday that they include several just returning to work because the attack by the notorious REvil gang came just as a long Fourth of July weekend began.
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.52%. Further, the yield on 2023 bond declined to 5.31%, while that for the longer-dated 2030 issue rose to 8.91%.

In early trade on Wednesday 07th July 2021, the US dollar is trading lower against the South African rand at R14.3672, while the euro is trading lower at R16.9826. The British pound has declined against the South African rand to trade at R19.8176.

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

  • German factory orders data reported a declined on a monthly basis, on account of a weaker automobile sector. Investor sentiment in Germany fell by much more than expected in July but remained at a very high level, while expectations for a strong economic recovery rose. However, a separate gauge of current conditions surged during the period. On the contrary, retail sales in the eurozone grew on account of the reopening of non-essential shops in the economy.
  • Westpac economists are now picking the Reserve Bank (RBNZ) will raise interest rates three times by May of next year. And economists at the country’s largest bank, ANZ, now see the Official Cash Rate hitting 1.75% by February of 2023. Westpac and ANZ both changed their calls on Wednesday and are now picking the first OCR move will be in November of this year. They have joined the economists at ASB and BNZ, both of which changed to a November call on Tuesday of this week. The final catalyst for the moves by the economists, following on from a string of positive economic data, was the release on Tuesday.
  • In line with expectations, the Reserve Bank of Australia has announced it will keep official interest rates on hold at 0.10%. But is also ready to start tapering off its “unconventional” monetary policy measures introduced in response to the COVID-19 economic crisis. These measures, designed to stimulate spending by keeping interest rates low for the next few years, have had two key components, 1) The “Yield Curve Control program”  involving the bank buying government bonds to keep interest rates at 0.1% for the next three years. 2) Quantitative Easing involving the RBA buying long-term government bonds.

In early trade on Wednesday, the euro marginally slipped against the US dollar to trade at $1.1824, while it has marginally gained against the British pound to trade at GBP0.8586.