LOCKDOWN LEVEL 1

TOTAL DAYS 555 – 07 HOURS 25 MINUTES 

Vaccine rollout day 206
New cases 809
New Deaths 27
Recovery Rate 95,6%
Vaccines Administered 17,875,187

By the close of trade on Friday 1st October 2021, the South African rand strengthened against the US dollar.

  • In South Africa, manufacturing activity declined in September, following a drop in business activity as factories experienced delays in getting raw materials and paid higher prices for inputs.
  • Vehicle exports declined in September, as civil unrest along with semiconductor shortages and plant closures slowed production.
  • In the US, consumer spending advanced in August, indicating a slowdown in economic growth in 3Q21.
  • Personal income increased in August, buoyed by enhanced tax breaks by the US Federal government. Meanwhile, personal expenditure advanced in August.
  • The ISM manufacturing PMI expanded in September, amid stronger demand, despite supply constraints.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond stood at 7.60%. Further, the yield on 2023 bond stood at 5.14%, while that for the longer-dated 2030 issue stood at 9.23%.
  • The US debt ceiling is in the news again due to Congressional gridlock, along with the possibility of a US sovereign default and the unintuitive idea of the US Treasury Department minting a trillion-dollar platinum coin to bypass the problem.
  • Asian markets were mixed on Monday, with Shanghai closed for the National Day holiday. Hong Kong’s benchmark shed more than 2% after troubled property developer China Evergrande’s shares were suspended from trading. The company did not say why, but a Chinese financial news service, Cailian, said another major developer was planning to buy Evergrande’s property management unit. Evergrande is struggling to make payments on tens of billions of dollars worth of debt as it endures a cash crunch brought on by a tightening of Chinese government restrictions on debt-leveraged financing. Hopson (754 HK) is to buy a 51% stake in China Evergrande (3333 HK) property management unit Evergrande Property Services (6666 HK) for HKD 40bln, according to Twitter reports citing Chinese press.  Evergrande, China’s second-largest property developer, is in peril. After a decade of massive growth, including investing in “Fairyland” theme parks, an electric car company and a professional football team (Guangzhou FC), it is now struggling to service debts exceeding US$300 billion. So far it has avoided the fate of dozens of its unfinished apartment towers demolished in spectacular fashion in recent weeks by selling off assets to make its payments.
  • A 2.94 terabyte data trove exposes the offshore secrets of wealthy elites from more than 200 countries and territories. These are people who use tax and secrecy havens to buy property and hide assets; many avoid taxes and worse. They include more than 330 politicians and 130 Forbes billionaires, as well as celebrities, fraudsters, drug dealers, royal family members and leaders of religious groups around the world. The International Consortium of Investigative Journalists spent more than a year structuring, researching and analyzing the more than 11.9 million records in the Pandora Papers leak.
  • The whistleblower who leaked thousands of internal Facebook documents to the Wall Street Journal revealed herself Sunday on CBS’ “60 Minutes” as Frances Haugen, a former lead product manager on the company’s civic misinformation team. Why it matters: On the show, Haugen said she realized this year that she needed to take tens of thousands of pages of documents so that “no one can question that this is real.” “Facebook, over and over again, has shown it chooses profit over safety,” she said. “It is subsidizing, it is paying for its profits with our safety.”
  • China recorded 17.3119 trillion yuan in outstanding external debt denominated in both domestic and foreign currencies, equivalent to 2.6798 trillion U.S. dollars, at the end of June. All major external debt indicators were within the internationally recognized thresholds, and China’s external debt risk is under control, the State Administration of Foreign Exchange said. In terms of maturity structure, the outstanding medium-and long-term external debt was 7.5707 trillion yuan, accounting for 44 percent. The outstanding short-term external debt was 9.7412 trillion yuan, taking up 56 percent, of which 38 percent was trade-related credit. In terms of institutional sectors, the outstanding debt of general government totaled 2.7486 trillion yuan, accounting for 16 percent, and the outstanding debt of banks totaled 8.1084 trillion yuan, accounting for 47 percent.  In terms of debt instruments, the balance of loans was 3.0696 trillion yuan, accounting for 18 percent, and the outstanding currency and deposits stood at 3.9773 trillion yuan, accounting for 23 percent.
  • China flew more than 30 military planes toward Taiwan on Saturday, the second large display of force in as many days. Taiwan’s Defense Ministry said 39 aircraft entered Taiwan’s air defense identification zone in two sorties, one during the day and one at night. That followed a similar pattern on Friday, when 38 planes flew into the area south of the self-governing island. China claims Taiwan, which lies off its east coast, as its territory. The two split in 1949 during a civil war in which the Communists took control of mainland China and the rival Nationalists set up a government on Taiwan.

In early trade on Monday 4th October 2021, the US dollar is trading higher against the South African rand at R14.9262, while the euro is trading higher at R17.3026.  The British pound has gained against the South African rand to trade at R20.1972.

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

  • In Germany, retail sales surged in August, amid an easing in the COVID-19 lockdown restrictions.
  • Manufacturing activity dropped marginally in September, as compared with that in the previous month.
  • The eurozone, factory activity expanded in September, despite weaker growth impacted by supply chain disruptions.
  • ANZ has dropped its personal loan interest rate from 12.90% to 9.95% for an unsecured loan, and is currently waiving the $115 application fee. The rate applies to the end of October, 2021. The loan amount can be between $3000 and $40,000, and for terms between six months and seven years.

In early trade on Monday 4th October 2021, the euro has marginally slipped against the US dollar to trade at $1.1586, while it has gained against the British pound to trade at GBP0.8572.

In closing todays report, the global economy is entering the final quarter of 2021 with a mounting number of headwinds threatening to slow the recovery from the pandemic recession and prove policy makers’ benign views on inflation wrong. The spreading delta variant continues to disrupt schools and workplaces. U.S. lawmakers are wrangling over the debt ceiling and spending plans. China is suffering an energy crunch and pursuing a regulatory crackdown, while markets remain on edge as China Evergrande Group struggles to survive. Fuel and food costs are soaring worldwide, combining with congested ports and strained supply chains.   Positive news in is that the UK may shorten the red list from 54 countries to just 9.  South African may just creep out of the woods.