LOCKDOWN LEVEL 3  [Adjusted ver. 3] 


Vaccine rollout day 198
New cases 12771
New Deaths 357
Recovery Rate 90.9%

By the close of trade on Thursday 26th August 2021, the South African rand strengthened against the US dollar. A deadly attack at Hamid Karzai International airport in Kabul.  12 US Servicemen have lost their lives with dozens more injured. Biden says he’s asked the US military for options to strike ISIS-K targets in response to today’s deadly attack in Kabul. Gen. McKenzie, the head of US Central Command, says the US military has Apache attack helicopters, MQ-9 Reaper drones, F-15 fighters and AC-130 Gunships flying over Afghanistan Kabul.

  • Meanwhile, the US economy grew at a faster pace in the second quarter of 2021. The growth in the US gross domestic product (GDP) was due to stronger consumer spending and exports. core personal consumption expenditure was steady as expected in 2Q21. However, consumer spending cooled as expenditure on services like airfares, cruises as well as hotels and motels declined. Also, initial jobless claims data rose for the week ended 21 August. Factory activity in the US expanded at a faster pace in August, as compared with the previous month, supported by durable goods plants, particularly primary metals, computer and electronic products, and transportation equipment.
  • It’s no secret that St. Louis Fed President James Bullard has been a leading the charge for the Fed to begin tapering it bond purchases. However, with markets on pins and needles ahead of tomorrow’s speech by Fed Chairman Powell at the Jackson Hole Symposium, the reaction to his comments this morning have thrown a shiver over the market: • “We’re getting more inflation than we expected” • “The economy has learned to adapt to the pandemic” • “The Fed should get going on taper and finish 1st Q 2022”.  Lets buckle up for a bumpy ride!
  • The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.34%. Further, the yield on 2023 bond advanced to 4.97%, while that for the longer-dated 2030 issue stood at 8.85%.

In early trade on Friday 27th August 2021, the US dollar is trading lower against the South African rand at R14.9166, while the euro is trading lower at R17.5326. The British pound has declined against the South African rand to trade at R20.4372.

By the close of trade on Thursday 26th August 2021, the euro declined against most of the major currencies.

  • In Germany, consumer confidence dampened as accelerating inflation and rising COVID-19 cases impacted the economy.
  • In the eurozone, the European Central Bank (ECB) policymakers changed the bank’s proposed interest rate outlook to ease off concerns and objections. Policymakers agreed on a proposal that promises a longer period of unchanged or lower interest rates, and links the first hike to an even more rise in inflation.
  • With its rate hike of 25 basis points today, to 0.75%, the Bank of Korea became the second central bank of a developed economy to hike its policy rate in this cycle. The first was Iceland, whose central bank hiked its policy rate on Wednesday by 25 basis points to 1.25%, after having already hiked it in May. These timid rate hikes follow the serial shock-and-awe rate hikes by the central banks in Russia and Brazil, among others, that started in the spring. The statement and the comments by Bank of Korea governor Lee Ju-yeol had a hawkish bent, pointing at further rate hikes in the future.
  • NSW Treasury estimates the direct cost of restrictions on mobility and gathering was about $1.3 billion a week at the end of July – when most of regional NSW was yet to experience any lockdown. Construction had also recently returned from a two-week closure, which Business NSW says may have cost as much as $1.4 billion on its own.
  • With the spread of the Delta variant, new COVID-19 infections are rising around the world, and much more so in regions and countries with low vaccination rates. Japan is no exception. Only around 40% of its population is fully vaccinated – compared to vaccination rates of 50-65% in the other G7 countries – and its infection rate has increased sharply over the past two months. As of August 24, its seven-day rolling average of daily confirmed cases was 23,036, up from 3,000 only one month earlier. Before the current surge, the highest seven-day average was around 6,500, reached in January and again in May of this year.  Core consumer prices in Tokyo stopped falling for the first time in over a year in August, data showed on Friday, underscoring the chance that nationwide inflation will perk up in the coming months on a recovery of domestic demand remained. The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, was flat in August compared with a year earlier, government data showed. That compared with a median market forecast for a 0.2% fall. It followed July’s 0.3% year-on-year drop, which was revised down from a 0.1% rise.
  • Global real house prices rose by 4.6% year on year in aggregate in the first quarter of 2021, representing the fastest growth rate recorded since the Great Financial Crisis (GFC) of 2007–09. This growth was particularly strong in advanced economies (AEs), 7.3% on average. Prices rose more moderately in emerging market economies (EMEs), by 2.5% on average with notable differences across regions: they increased by 7.0% in central and eastern Europe, 3.0% in Latin America and 1.5% in emerging Asia, but remained flat in the Middle East and Africa (+0.8%).

In early trade on Friday 27th August 2021, the euro advanced marginally against the US dollar to trade at $1.1762, while it has gained against the British pound to trade at GBP0.8462.