LOCKDOWN LEVEL 2 

TOTAL DAYS 540 – 07 HOURS 30 MINUTES 

Vaccine rollout day 218
New cases  4215
New Deaths 311
Recovery Rate 94,2%

By the close of trade on Thursday 16th September 2021, the South African rand weakened against the US dollar.

  • The Federal Reserve may hold off on its tapering announcement amid week economic data and as the two political parties spar on raising the debt ceiling, sending Treasury yields further down. The decision, which most investors expect to come in November, could be delayed to December as the “upcoming drama” in Washington surrounding the debt ceiling could lead to a market turmoil and possible economic disruptions.
  • The U.S. consumer price index (CPI) has jumped to its highest annual rate since 2008, yet the housing components of the index (rent and owners’ equivalent rent) have decelerated considerably since the start of the pandemic (Figure 1). For the first time in nearly a decade, housing costs have risen more slowly than the overall CPI. While the headline inflation rate currently stands at 5.4%, the CPI for shelter (which includes rental payments and mortgages) has increased only 2.6% year on year.
  • US, retail sales unexpectedly surged in August.  August just so happens to be one of the key months on the retail calendar. In most years, more retail sales happen during it than in even November (Christmas – December remains always as the big one) as parents pick up as much and many back-to-school supplies and material as they can afford.
  • Initial jobless claims rose in the US, led by a jump in Louisiana, as Hurricane Ida continues to throw a wrench in the labor market’s broad recovery.
  • Manufacturing activity in the US accelerated in September, despite material shortages.

The yield on benchmark government bonds fell yesterday. The yield on 2026 bond stood at 7.41%. Further, the yield on 2023 bond declined to 4.94%, while that for the longer-dated 2030 issue fell to 8.90%.

In early trade on Friday 17th September 2021, the US dollar is trading higher against the South African rand at R14.6126, while the euro is trading higher at R17.1936.  The British pound has gained against the South African rand to trade at R20.1389.

By the close of trade on Thursday 16th September 2021, the euro declined against most of the major currencies.

  • In the eurozone, trade surplus widened in July.
  • European Central Bank (ECB) President, Christine Lagarde stated that the eurozone economy is regaining quicker than anticipated, mostly due to rapid vaccination drives that allowed large sectors of the economy to reopen.
  • France is not holding back showing its disappointment with Australia after it abruptly ended a submarine contract in order to sign a new deal with the U.S. and U.K. “It was a stab in the back. We had established a relationship of trust with Australia. This trust has been betrayed,” Jean-Yves Le Drian, France’s minister for foreign affairs, told radio station France Info Thursday morning. Australia had signed a contract with French shipbuilder Naval Group in 2016 to build a new fleet, at a cost of $40 billion.
  • Australia’s labour force statistics for August again make the case for giving up on the rate of unemployment as an indicator of the state of the labour market. In June the official unemployment rate dropped below 5% for the first time since before the Global Financial Crisis of 2008. In July it dropped again, to 4.6%. With major lockdowns across Australia since late July, the rate for August was widely expected to go up. Yet the Australian Bureau of Statistics’ figures show that while total hours worked were 5.6% down on their May peak, the jobless rate defied all predictions and fell again, to 4.5%.

In early trade on Friday, the euro has marginally slipped against the US dollar to trade at $1.1782, while it has marginally gained against the British pound to trade at GBP0.8548.