Vaccine rollout day 170

New cases 14858
New Deaths 433
Recovery Rate 90.1%

By the close of trade on Thursday 22nd July 2021, the South African rand weakened against the US dollar. Today the Olympics opening ceremony takes place behind closed doors with just the World press in attendance.  Star Olympic swimmer Chad le Clos and women’s hockey goalkeeper Phumelela Mbande will carry South Africa’s flag at the opening ceremony of the Tokyo Olympic Games. It’s the start of sports overload as we head into the weekend.  Olympics + Springbok Rugby.  This weekend my blood is Green GO TEAM SA and BOKKE!!!

  • The South African Reserve Bank (SARB) kept its key interest rate unchanged at a five-decades low, as the unrest in the country had over shadowed the strong recovery reported in 1Q21 and led to a decline in the FY21 forecasts. The SARB lowered its forecasts for core inflation, which excludes food and energy, to 2.9% in 2021, compared with a previous 3.0%.
  • In the US, the number of people filing new claims for unemployment benefits rose to a two-month high for the week ended 16 July, indicating that the labour market is far away from the recovery with a resurgence in the coronavirus infections in the country.   Demand for housing in the States spiked soon after the pandemic struck as Federal Reserve interest rates cuts and quantitative easing drove down borrowing costs right across the economy. This has of course made housing more affordable for those who kept their jobs with the 30Y fixed mortgage rate dropping from 3.82% in late March 2020 and bottomed at 2.85% in December. It has since moved higher and is currently 3.11%, but that is still nearly 2 percentage points below the 2000-2021 average. Moreover, mortgage debt servicing costs are currently accounting for less than 4% of total household disposable income.
  • The Chicago Fed National Activity reported a decline in June. The existing home sales rebounded in June, but the pace was moderate as higher prices and low inventory remained constraints.
  • The world’s most valuable oil producer Saudi Aramco has confirmed to the BBC that company data has leaked from one of its contractors. The files are now reportedly being used in an attempt to extort $50m (£36.5m) from the company. The global oil and gas industry has long been criticised for failing to invest in cyber security. In May, the Colonial Pipeline in the US was hit by a ransomware cyber-attack. In an emailed statement, Aramco told the BBC that it “recently became aware of the indirect release of a limited amount of company data which was held by third-party contractors.”
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.41%. Further, the yield on 2023 bond declined to 5.09%, while that for the longer-dated 2030 issue rose to 8.95%.

In early trade on Friday 23rd July 2021, the US dollar is trading higher against the South African rand at R14.7268, while the euro is trading higher at R17.3286.  The British pound has gained against the South African rand to trade at R20.2546.

By the close of trade on Thursday 22nd July 2021, the euro declined against most of the major currencies.

  • The European Central Bank (ECB) assured of keeping the interest rates to the lowest for a longer period until the inflation rate touches its target rate of 2.0%, ahead of the end of “projection horizon and durably”. Further, ECB President, Christine Lagarde cautioned that the fresh wave of coronavirus infections could be a risk in the eurozone’s economic rebound.
  • The Bank of England’s Deputy Governor, Ben Broadbent stated that the rise in the retail goods does not necessarily indicate inflation to continue in the long run and that its focus remains mostly on the labour market.
  • British Business Secretary Kwasi Kwarteng said the European Union had been inflexible over renegotiating the Northern Ireland part of the Brexit divorce deal and cautioned Brussels that it was not a deal that would last for ever. “A deal is a deal but it wasn’t something that was going to last forever,” Kwarteng told Sky. “It was something that was flexible and we want to make it work more smoothly.”
  • The growth streak for the Australian private sector ended in July according to Flash PMI® data which showed business activity in contraction. Survey respondents signalled that renewed restrictions, brought about by the spread of the Delta variant of the COVID-19 virus, affected demand and output in the country. Business sentiment likewise softened in the month.
  • New Zealand’s PM Adern has suspended quarantine travel for at least 8 weeks.

In early trade on Friday, the euro marginally advanced against the US dollar to trade at $1.1796, while it has gained against the British pound to trade at GBP0.8572.