LOCKDOWN LEVEL 3  [Adjusted ver. 3] 


Vaccine rollout day 197
New cases 10478
New Deaths 170
Recovery Rate 90.8%

By the close of trade on Friday 20th August 2021, the South African rand weakened against the US dollar.

  • It was a dramatic week in the capital markets. Equities and commodities got hit hard while the dollar soared, especially against the major currencies typically seen as levered to world growth and whose central banks are perceived to be ahead of the Federal Reserve. These include the dollar-bloc currencies and the Norwegian krone. The RBNZ held off its rate hike amid a virus-induced lockdown. Nevertheless, Governor Orr made it clear a rate hike was still necessary, most likely for the next meeting on October 5. On the other hand, Norway’s central bank confirmed it was on track to hike next month.
  • Concerns about economic recovery and fresh coronavirus outbreaks weighed on global sentiment.
  • For only the third time in history, the Pentagon Orders Airlines to Assist in a Military Operation. Airlines began positioning aircraft to comply with a Pentagon order, announced Sunday morning under a rarely invoked law, which compelled six airlines to contribute 18 planes to help with the evacuation. The first flights carrying evacuees were expected Monday. Officials said the commercial aircraft wouldn’t fly in and out of Kabul but would ferry evacuees to the U.S. from bases in Germany, Qatar and Bahrain to ease transport bottlenecks. The airlift is now entering a critical phase, ramping up after days of mayhem.  President Joe Biden on Sunday said the U.S. has a “long way to go and a lot could still go wrong” amid ongoing evacuation of Americans and Afghan allies from Kabul after the Taliban took over Afghanistan one week ago. “The evacuation of thousands of people from Kabul is going to be hard and painful no matter when it started, when we began,” the president said during a press conference at the White House. “It would have been true if we had started a month ago, or a month from now” stated Biden.  The deadline for troops to withdraw from Afghanistan is just days away and the desperate evacuation of people is running out of time. The Taliban has met with Sky News in Doha to discuss what happens next – and issued a stark warning about the withdrawal of troops from the country. Taliban spokesperson Dr Suhail Shaheen said: “It’s a red line. President Biden announced that on 31 August they would withdraw all their military forces. So if they extend it that means they are extending occupation while there is no need for that.”
  • The Federal Reserve is buying $120 billion in bonds per month, part of a package of emergency measures to prop up the US economy during the pandemic. But as activity returns to normal, is that level of support necessary? That’s among the key questions facing central bankers when they gather for an annual meeting in Jackson Hole, Wyoming this week. The event, which usually includes central bankers from around the world, will be a pared-back affair due to the pandemic. Neither European Central Bank President Christine Lagarde nor Bank of England Governor Andrew Bailey will be in attendance.
  • The Chinese Communist Party has a new catchphrase to guide its economic policy, a “cross-cyclical” approach that government advisers say means taking action sooner, in smaller steps and with a longer time frame in mind. It’s a departure from counter-cyclical policy, which is when central banks and governments add stimulus to spur a slowing economy, like cutting interest rates or taxes and boosting infrastructure investment and tighten when growth starts accelerating.
  • The yield on benchmark government bonds were mixed on Friday. The yield on 2026 bond stood at 7.34%. Further, the yield on 2023 bond declined to 4.99%, while that for the longer-dated 2030 issue rose to 8.93%.

In early trade on Monday 23rd August 2021, the US dollar is trading lower against the South African rand at R15.2472, while the euro is trading lower at R17.8562.  The British pound has declined against the South African rand to trade at R20.8026.

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

  • In Germany, the producer price index (PPI) increased in July.
  • GfK’s consumer-confidence was down in August, as compared with that in July, as the spread of the Delta variant of coronavirus took its toll on confidence over the past three months.
  • NZ PM Ardern: NZ lockdown extended until midnight August 27th 2021.  Prime Minister Jacinda Ardern says six days into the outbreak, the government has identified the source of the outbreak as a returnee from NSW who was at the Crowne Plaza before being transferred to quarantine at the Jet Park. “We’ll continue with that investigation and update you as we go.” She says testing during the six-day period is a record “by quite some way”, and accounts for about 3 percent of the population. Some 108,000 tests have been taken in Auckland, she says, and thanks those who waited in queues, saying with additional testing center’s being stood up wait times are starting to reduce.

In early trade on Monday 23rd August 2021, the euro advanced against the US dollar to trade at $1.1715, while it has marginally weakened against the British pound to trade at GBP0.8588.