LOCKDOWN LEVEL 3  [Adjusted ver. 3] 


Vaccine rollout day 184

New cases 6787
New Deaths 199
Recovery Rate 90.8%

By the close of trade on the 6th August 2021, the South African rand weakened against the US dollar. On the sports front the Springboks held aloft the Lions Series trophy.  A tough bruising 3 test series that was decided in the dying minute of the 3rd game.  The Springboks now head into the Rugby Championship where they face Argentina / Australia and New Zealand.  This provides the Springboks with a rare opportunity to win the Championship and hold aloft the 3 Titles [World Champions / Lions Champions and Rugby Championship].  The Olympics closed and Team SA could only rake in 3 medals.  SASCOC has not done the country proud with mismanagement and corruption rife.

  • The Atlanta Federal Reserve (Fed) Bank President, Raphael Bostic stated that he is eyeing the 4Q21 period for the start of a bond-purchase taper. Further, he added that if the job market keeps up its recent stifling pace of improvement, he is open to an even earlier move. Richmond Fed President, Tom Barkin stated that the US economy is growing rapidly, and that inflation is already at a level that could satisfy for a beginning of rate hikes. Fed’s Rosengren says the central bank should announce in September that it will begin reducing its $120 billion in purchases of treasury and mortgage bonds this fall.
  • The economic calendar may not be as jammed pack this week compared to last but if today’s moves in commodities are a sign, this could be a very active week in the financial markets. Gold prices ended the day down 2% after dropping more than 4% at the start of Asia trade. Oil prices settled the day down about the same amount after bouncing off lows. The U.S. dollar was mixed at the start of the NY session but with Treasury yields turning positive, the greenback ending higher against all of the major currencies.
  • Now is a good time for the People’s Bank of China (PBOC) to cut interest rates,” China Daily reports, citing a senior researcher at the Chinese Academy of Social Sciences (CASS). Key quotes “Domestic demand remains insufficient.” “Monetary policy of the United States has not entered a tightening cycle.” “Domestic consumption remains relatively weak compared with the pre-COVID level and growth in the labor market has come to a standstill.” In another editorial, China Daily said that there is no need for the country’s central bank to add in Open Market Operation (OMO) funds in the short term.
  • The US restaurant industry is experiencing increased labor cost and inflationary pressure exiting the pandemic, but pent-up demand and fiscal stimulus have supported a strong recovery in restaurant sales, enabling companies to pass rising costs through to customers, says Fitch Ratings. Increased operating efficiency achieved during the pandemic has enhanced restaurants’ ability to manage through the labor shortage, better positioning them to absorb higher compensation and benefit costs where necessary, reducing credit risk for many operators.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.41%. Further, the yield on 2023 bond advanced to 5.02%, while that for the longer-dated 2030 issue rose to 8.94%.

In early trade on Tuesday 10th August 2021, the US dollar is trading marginally lower against the South African rand at R14.7772, while the euro is trading marginally lower at R17.3462.  The British pound has declined against the South African rand to trade at R20.4546.

By the close of trade on Friday 6th August 2021, the euro advanced against most of the major currencies.

  • In Germany, trade surplus widened as exports jumped more than expected in June, despite supply constraints in the domestic manufacturing sector, driven by business with the US and China.
  • In the UK, sports events and the summer holidays lead to a big increase in consumer spending in July, supported by the lifting of COVID-19 restrictions. Helen Dickinson, chief executive of the BRC, said: “July continued to see strong sales, although growth has started to slow. “The lifting of restrictions did not bring the anticipated in-store boost, with the wet weather leaving consumers reluctant to visit shopping destinations.” Data from Barclaycard, meanwhile, showed a growth in spending on entertainment for the first time since the pandemic began, as cinemas, theatres and sporting events have widely reopened. Card spending grew 11.6% in July compared to the same period in 2019, with the entertainment industry seeing growth of 8.1% and pubs, bars, and clubs
  • Japan’s bank lending rose in July at the slowest annual pace in nearly nine years, data showed on Tuesday, a sign companies were emerging steadily from a cash crunch last year caused by the coronavirus pandemic. But the slowdown in lending also reflected sluggish consumption as households hoarded cash instead of spending, underscoring the fragile nature of Japan’s economic recovery. Total bank lending rose 1.0% in July from a year earlier, Bank of Japan data showed, slowing from a 1.4% gain in June and marking the lowest year-on-year increase since November 2012.

In early trade on Tuesday, the euro has marginally advanced against the US dollar to trade at $1.1746, while it has marginally gained against the British pound to trade at GBP0.8632.