LOCKDOWN LEVEL 4 Ver 2

TOTAL DAYS 469 – 09 HOURS 00 MINUTES 

Vaccine rollout day 155 

New cases 21427

Single day deaths 411

By the close of trade on Wednesday, the South African rand strengthened against the US dollar. An hour before a constitutional court ruling expired, Jacob Zuma taken to Estcourt prison after day of high drama.  Shortly after 01h15 former President Zuma was handed over to Prison authorities at the Eshowe prison facility where he is rumored to be housed within the new medical wing of the facility.  The day of high drama began when MKMVA Carl Niehaus was suspended from the ANC for bringing the party into disrepute.

  • Meanwhile, NKC African Economics stated that it had raised its 2021 economic growth forecast for South Africa to 4.3% on the back of increased activity and mobility in recent months.
  • In the US, the June FOMC minutes confirms that the Federal Reserve is edging closer to tapering asset purchases. According to today’s release, “various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had anticipated at previous meetings.” The U.S. dollar edged slightly higher on the back of the release as the Fed minutes support renewed greenback demand. U.S. policymakers are growing more comfortable with the idea of reducing asset purchases and an announcement could be made as quickly as the fourth quarter of 2021.
  • On the data front, job openings rose slightly to a new record high in May and hiring dipped, a sign that the domestic economy could still be struggling with labour shortages as coronavirus restrictions eased across the country. Canadian economic activity expanded at a faster pace in June as measures of employment and prices rose, Ivey Purchasing Managers Index (PMI) data showed on Wednesday. The seasonally adjusted PMI rose to 71.9 from 64.7 in May. That was the highest level for the index since March, when it notched a 10-year peak of 72.9. The Ivey PMI measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers in the public and private sectors from across Canada. A reading above 50 indicates an increase in activity.
  • The Chinese government held a regular meeting and decided to cut the targeted reserve requirement ratio (RRR) for small and medium enterprises (SMEs) when necessary, it also didn’t rule out other monetary policy tools to help SMEs. Economists believe a cut will come soon. The cost pressures of SMEs mostly comes from high commodity prices, although the Chinese government has already acted to reduce commodity prices using both market-based and administrative measures.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.48%. Further, the yield on 2023 bond declined to 5.27%, while that for the longer-dated 2030 issue fell to 8.89%.

In early trade on Thursday 8th June 2021, the US dollar is trading higher against the South African rand at R14.3672, while the euro is trading higher at R16.9422.  The British pound has gained against the South African rand to trade at R19.7827.

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

  • The eurozone economic growth forecasts showed a faster than anticipated economic growth with activity in 1Q21 being more than expected. Moreover, an improving health situation drive a rapid reopening of the economy in 2Q21.
  • Meanwhile, German industrial production declined unexpectedly, amid the ongoing pandemic affecting production.
  • A lack of available properties is helping to push up house prices, surveyors say. As a result, a majority of Royal Institution of Chartered Surveyors (RICS) members think prices will continue to rise over the next year. The shrinking supply meant the number of new properties coming to the market fell by a third in June. But with no let-up in demand, all parts of the UK continued to report robust increases in house prices, RICS said.
  • British companies are raising wages more rapidly to overcome difficulties in attracting staff, adding to upward pressures on inflation as pandemic restrictions ease. Starting salary increases approached a seven-year high, with all regions of the U.K. experiencing rapid rises, according to data from the Recruitment and Employment Confederation, KPMG and IHS Markit.

In early trade on Thursday, the euro marginally advanced against the US dollar to trade at $1.1796, while it has gained against the British pound to trade at GBP0.8532.