Vaccine rollout day 159 

New cases 16302

Single day deaths 151

By the close of trade on Friday 9th July 2021, the South African rand strengthened against the US dollar. In South Africa, President Ramaphosa announced a slight variation to the lockdown level 4 as the eThekwini region went up in flames with vandalism and rioters causing chaos and destruction across the 031region.  Targeted in the main were shopping malls and bottle stores with many being torched after being looted. Please take extra special care today and be very vigilant should you need to leave your home today.  The Zuma saga moves into the Constitutional court for a “review” as Zuma’s legal team try another angle.

  • The US Federal Reserve (Fed) stated that material scarcity and strained hiring has detain the US economy to recover from the COVID-19 pandemic hit and has driven the temporary period of inflation. A tumble in Treasury yields is pushing some investors toward other income-generating vehicles including dividend-paying stocks and emerging market bonds, often in exchange for a greater degree of risk. Earlier this year, few expected that Treasury yields would sink closer to historic lows by summer despite a resurgence of U.S. growth after the coronavirus pandemic. Yet the Federal Reserve’s hawkish shift, demand from investors in countries where domestic bonds offer flat or negative returns and the unwinding of popular short bets on Treasuries have depressed yields.
  • China’s V-shaped economic rebound from the Covid-19 pandemic is slowing, sending a warning to the rest of world about how durable their own recoveries will prove to be. The changing outlook was underscored Friday when the People’s Bank of China cut the amount of cash most banks must hold in reserve in order to boost lending. While the PBOC said the move isn’t a renewed stimulus push, the breadth of the 50 basis-point cut to most banks reserve ratio requirement came as a surprise. Data on Thursday is expected to show growth eased in the second quarter to 8% from the record gain of 18.3% in the first quarter.
  • Hong Kong stocks rose for a second day after China’s central bank cut the amount of money commercial lenders must set aside as reserves in an effort to sustain a recovery from the pandemic. The Hang Seng Index advanced 0.7 per cent to 27,530.36 at the noon break. The Hang Seng Tech Index, which last week saw a wipeout of more than US$600 billion in market cap from a February peak, rebounded by 1 per cent. China’s Shanghai Composite Index added 0.9 per cent. The ChiNext gauge of small caps surged saw a 4 per cent surge. The 0.5 percentage point cut in the reserve requirement ratio, which was announced after the market closed on Friday, will unleash about 1 trillion yuan (US$154.5 billion) into the financial system, according to the People’s Bank of China.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.42%. Further, the yield on 2023 bond declined to 5.17%, while that for the longer-dated 2030 issue fell to 8.85%.

In early trade on Monday, the US dollar is trading higher against the South African rand at R14.2766, while the euro is trading higher at R16.9486. The British pound has gained against the South African rand to trade at R19.8332.

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

  • Gross Domestic Product (GDP) in the UK grew weaker than expected on a monthly basis, despite easing of lockdown restrictions. The Bank of England Governor, Andrew Bailey stated that the world needs strong openness in order to prevent the breakup of supply chains.
  • The European Central Bank policymakers discussed a cut in stimulus as the retrieval picked up pace but eventually found “broad agreement” to maintain an elevated level of support. Further, policymakers concluded that an early retreat from the market could push yields higher and hinder growth as some key sectors were not yet on a solid enough footing, even if growth was now relatively quick.
  • Japanese wholesale prices continued to surge in June as import costs spiked at the fastest pace on record, data showed on Monday, a sign rising raw material costs were weighing on corporate profits. Households may also start to feel the pinch as recent increases in oil costs are likely to push up consumer inflation in coming months, though the rebound will be more modest in Japan than in other advanced nations due to weak demand, analysts say. The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 5.0% in June from a year earlier.  Japan’s core machinery orders rose for the third straight month in May, a welcome sign for an economy struggling to overcome the hit from the coronavirus pandemic. The government imposed a new state of emergency in Tokyo that will run through to Aug. 22 in an attempt to control the health crisis, clouding the outlook for the economy even as activity in many other countries rebounds. The jump in core orders indicates a modest revival in corporate spending, seen by policymakers as necessary to accelerate Japan’s tepid recovery.

In early trade on Monday 12th July 2021, the euro has marginally slipped against the US dollar to trade at $1.1827, while it has marginally gained against the British pound to trade at GBP0.8562.