LOCKDOWN LEVEL 1

TOTAL DAYS 602 – 07 HOURS 30 MINUTES 

Vaccine rollout day 250
New cases  585
New Deaths  40
Recovery Rate 96,3%
Vaccines Administered 24,471,210

By the close of trade on Thursday 18th November 2021, the South African rand weakened against the US dollar. The ZAR has had a torrid time this past week with loadshedding and water shortages adding immense pressure to the EM Currency.

  • In South Africa, the SARB unexpectedly increased its key interest rate to 3.75% from a record low, amid persistent concerns about rising inflation.
  • In the US, number of initial jobless claims dropped to pre-pandemic levels following recovery in the labour market, despite continued labour shortages.
  • The Philadelphia Fed Manufacturing index rose to a 7-month high indicating strength in the manufacturing sector, despite soaring inflation. Meanwhile, the New York Federal Reserve (Fed) Bank President, John Williams stated that inflation in the US is becoming broad based and expectations for future price increases are rising, a trend policymakers will be watching closely. Also, Chicago Fed President, Charles Evans alleged that he sees “good momentum” for the US economy next year, as supply chain constrains currently slowing production of cars and snarling traffic at ports get rectified.
  • If Lael Brainard is named Federal Reserve chairman, the first move by financial markets may be to price in an even more dovish central bank. That means the Fed would be expected to take longer to raise interest rates or tighten policy than under Fed Chairman Jerome Powell. Currently, traders are expecting the Fed to begin raising rates in the second half of next year, once it winds down its bond buying program. Until just recently, Powell was expected to be renominated to the chairmanship, but President Joe Biden has now interviewed both Powell and Brainard and is expected to make an announcement by the weekend.
  • U.S. President Joe Biden hosted Canadian and Mexican leaders on Thursday for their first North American summit in five years in a bid to revitalize regional cooperation that was shadowed by tensions over Biden’s “Buy American” agenda and immigration. Biden met separately at the White House with Canadian Prime Minister Justin Trudeau and Mexican President Andres Manuel Lopez Obrador, and then held a gathering with all three.
  • An indictment was unsealed in New York today charging two Iranian nationals for their involvement in a cyber-enabled campaign to intimidate and influence American voters, and otherwise undermine voter confidence and sow discord, in connection with the 2020 U.S. presidential election.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.97%. Further, the yield on 2023 bond advanced to 5.23%, while that for the longer-dated 2030 issue rose to 9.45%.

Inn early trade on Friday 19th November 2021, the US dollar is trading marginally lower against the South African rand at R15.6456, while the euro is trading lower at R17.7596.  The British pound has declined against the South African rand to trade at R21.0956.

By the close of trade on Thursday 18th November 2021, the euro advanced against most of the major currencies.

  • In the eurozone, the European Central Bank’s Chief Economist, Philip R. Lane stated that eurozone inflation will ease next year and there is no sign that investors or consumers expect runaway prices in the medium term.
  • People in Britain turned more confident this month despite worries about inflation and they were more willing to purchase expensive items, according to a survey that will be welcome news to retailers preparing for the Christmas season. The GfK Consumer Confidence Index rose for the first time in four months to -14 in November from -17 in October which was its lowest level since an early-2021 coronavirus lockdown.  A Brexit-fueled labor shortage is likely to mean the Bank of England increases interest rates before any of its major peers, according to Goldman Sachs Asset Management. The firm is betting against U.K. government debt, predicting the U.K. central bank will raise borrowing costs next month before two more increases by June 2022. It’s also short on the pound, with the risk of further disruption to trade between the U.K. and European Union.
  • The Swiss franc hit its strongest level against the euro in more than six years as a renewed surge of Covid-19 infections in Europe buoyed demand for haven assets. The Swiss currency climbed as much as 0.1% on Thursday, briefly pushing it through the 1.05 psychological resistance level against the common currency. That move briefly put the pair at its lowest since July 2015, before reversing course and heading higher. Traders have piled into the haven currency as Europe appears to be on the brink of a fourth wave of Covid-19 infections.

In early trade on Friday 19th November 2021, the euro slipped against the US dollar to trade at $1.1372, while it has weakened against the British pound to trade at GBP0.8456.