LOCKDOWN LEVEL 1

TOTAL DAYS 573 – 07 HOURS 30 MINUTES 

Vaccine rollout day 222
New cases  453
New Deaths 50
Recovery Rate 96,3%
Vaccines Administered 20,580,832

By the close of trade on Tuesday 19th October 2021, the South African rand strengthened against the US dollar. At the time of writing this there is a developing story – Bomb threat near the Capitol, at the Department of Labor. US Capitol Police have now closed the following roads:

• First Street and Constitution Avenue NW

• First Street and Louisiana Avenue NW

In the US, homebuilding dropped in September and permits declined to a year low, following shortage of raw materials and labour constraints, thus indicating towards a slower pace of economic growth in 3Q21.

The US Federal Reserve (Fed) Governor, Christopher Waller stated that if inflation keeps increasing at the current pace in coming months rather than lessening, Fed policymakers may need to adopt a more aggressive policy response in the next year. Compared with the rest of the world’s central banks, the market’s timetable for when the Federal Reserve will start raising interest rates looks positively subdued. Most others, with the exception of the European Central Bank, are expected to move at a far speedier pace. U.S. traders are now pricing a full rate hike into the Fed’s September policy meeting next year. But by that time, New Zealand’s central bank would have hiked five times, Canada’s three times and England’s four times, according to the interest-rate swaps market. Yet some think that’s an overly hawkish view.

The United Nations Security Council has decided to hold an emergency meeting on Wednesday to discuss North Korea’s most recent missile launch. This comes after North Korea announced that it successfully test-launched a new type of submarine-launched ballistic missile on Tuesday. UN diplomatic sources say the meeting will be held at the request of the United States, Britain, and France. The Security Council held an emergency meeting following the North’s previous missile launches on September 15 and 28.

BITCOIN flirts with record high 63764.19 =1USD

Credit Suisse Group AG, a global financial institution headquartered in Switzerland, and Credit Suisse Securities (Europe) Limited (CSSEL), its subsidiary in the United Kingdom (together, Credit Suisse), have admitted to defrauding U.S. and international investors in the financing of an $850 million loan for a tuna fishing project in Mozambique, and have been assessed more than $547 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.

The US released September inflation data last week, with headline CPI at 5.4% and Core Inflation at 4%. In addition, US PPI was 8.6%, while the Core PPI was 6.8%. China’s PPI was 10.7% as well. All these prints were either the same or higher than August’s prints, with some at decade highs. (Note that China’s inflation rate was only 0.7% vs 0.8% in August, mainly due to steep declines in pork prices, down 46.9%!). However, Wednesday is really inflation day. Watch this space!

The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.92%. Further, the yield on 2023 bond declined to 5.40%, while that for the longer-dated 2030 issue fell to 9.38%.

In early trade on Wednesday 20th October 2021, the US dollar is trading marginally lower against the South African rand at R14.5272, while the euro is trading marginally higher at R16.9066. The British pound has gained against the South African rand to trade at R20.0522.

By the close of trade on Tuesday 19th October 2021, the euro declined against most of the major currencies.

The British pound has posted considerable gains in the Tuesday session. GBP/USD is currently trading at 1.3805, up 0.57% on the day. Earlier in the day, the pound climbed to 1.3838, its highest level since September 16th. Rate fever on the rise The BoE has been sending a steady diet of hawkish messages to the markets about rate policy, and the markets have responded in kind. The markets have priced in a 90% likelihood that the BoE will hike rates by 0.25% at the next policy meeting on November 4th.

Eurozone construction output softened in August, bringing five months of growth to an end.

Japan’s export growth weakened to its slowest in seven months in September, while a surge in imports added to worries that pandemic-led global supply chain snags could derail the country’s fragile economic recovery. Exports are losing steam at a time when a weaker yen and a spike in oil prices have pushed up import costs, hurting resource-poor Japan’s terms of trade and potentially undermining Prime Minister Fumio Kishida’s pledge to correct wealth gaps.

In early trade on Wednesday 20th October 2021, the euro has marginally advanced against the US dollar to trade at $1.1640, while it has marginally weakened against the British pound to trade at GBP0.8436.