LOCKDOWN LEVEL 3  [Adjusted ver. 3] 


Vaccine rollout day 182

New cases 13 777
New Deaths 458
Recovery Rate 90.8%

By the close of business on Thursday 5th August 2021, the South African rand weakened against the US dollar. President Cyril Ramaphosa finally came out the closet with his long talked about cabinet reshuffle.  Disappointing that he thanked Zweli Mkhize for his service after the Minister had resigned ahead of the shuffle.  Mkhize has been embroiled in a corruption scandal running into hundreds of millions of Rands.

  • The CSIR report on Eskom loadshedding added to the woes as the stats showed that SA had been in darkness for 859 hours over the last year and that this year alone we had reached 650 hours already.
  • In the US, initial jobless claims fell less than expected for the week ended 31 July, with companies holding on to workers, amid labour force bottlenecks.  The uncertainties of Covid, spreading again at a rapid pace, has become a wild card for the labor market, just as it has for the broader economy. The rate of new infections in the U.S. is edging toward 100,000 per day, faster than last summer when there were no widely available vaccines.
  • The Fed’s Board Governor, Christopher Waller stated that digital dollar is not the solution for any problem faced by the economy currently. He pointed out that the private banking system and the Fed are currently undertaking projects that allow payments to be made immediately after they are initiated.
  • Canada’s trade surplus swung to its widest point since 2008 in June as exports of products like oil surged while imports shrank. Statistics Canada reported Thursday that exports surged by 8.7 per cent to $53.8 billion. Energy led the way with exports rising by 22 per cent to $11.3 billion. That’s the largest amount since March of 2019. Cars and car parts were also up, by 14.9 per cent, as were metal and non-metallic minerals, which rose by 12.7 per cent. All in all, Canada exported $4.3 billion more goods and services to the world in June than it did the previous month.
  • Venezuela says it will make a million-to-1 change in its currency soon, eliminating six zeros from prices in the local currency as hyperinflation continues to plague the troubled South American country. Venezuela’s central bank on Thursday announced the change to the bolivar will go into effect on October 1. The new 100 bolivar banknote will be the highest denomination. It is equivalent to 100,000,000 of the current bolivar. This is the third adjustment since socialist leaders began governing Venezuela.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 5.00%. Further, the yield on 2023 bond advanced to 8.86%, while that for the longer-dated 2030 issue rose to 7.34%.

In early trade on Friday 6th August 2021, the US dollar is trading higher against the South African rand at R14.5362, while the euro is trading higher at R17.1826.  The British pound has gained against the South African rand to trade at R20.2346.

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

  • The BoE kept its interest rates unchanged but has warned of an above the target inflation in the near term. The central bank’s monetary policy report added that the rise in the consumer price index was due to the rising prices for goods and energy. The BoE Governor, Andrew Bailey stated that unemployment is not expected to rise, as Finance Minister, Rishi Sunak’s job-protecting furlough scheme is phased out at the end of September. He added that the bank would not increase its rates as the economy is still fragile and the price rise is persistent.
  • German factory orders increased more than double in June, amid increased domestic demand for large manufacturing products.
  • Reserve Bank of Australia (RBA) governor Philip Lowe says the quicker everyone gets vaccinated the less economic damage we will incur, and the faster we can open up. He said the outbreak of the Delta strain in New South Wales, and the impact of recent lockdowns in neighboring states, would affect the national economy significantly in coming months. Speaking to a parliamentary committee in Canberra on Friday, Dr Lowe warned we were entering a tough period, and economic activity was going to contract in the third quarter.
  • Japan’s household spending unexpectedly fell in June as cuts to summer bonuses hit consumption, data showed on Friday, adding gloom to an economy already struggling with the hit from a resurgence in coronavirus infections. The figures underscore the challenge policymakers face as they seek to support a fragile economic recovery, while battling a spike in Delta variant cases that has forced Japan to expand state of emergency curbs during the Olympic Games.

In early trade on Friday 6th August 2021, the euro has slipped against the US dollar to trade at $1.186, while it has marginally weakened against the British pound to trade at GBP0.8526.