LOCKDOWN LEVEL 1

TOTAL DAYS 630 – 07 HOURS 38 MINUTES 

Vaccine rollout day 280
New cases  24 785
New Deaths  36
Recovery Rate 90,8%
Vaccines Administered 27,422,495

As of today the cumulative number of COVID19 cases identified in SA is 3 255 816 with 24 785 new cases reported. Today 36 deaths have been reported bringing the total to 90 262 deaths. The cumulative number of recoveries now stand at 2 954 919 with a recovery rate of 90,8%.

South Africa remains unchanged on Alert level 1.

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

  • In South Africa, inflation accelerated to its highest level in more than four years amid soaring fuel prices.
  • The producer price index (PPI) increased more than expected in November.
  • In the US, the Fed revealed that it is likely to put an end to its bond purchase programme in March 2022 and increase its key interest rate 3 times by the end of 2022.
  • US, manufacturing activity decelerated to a one year low in December, despite strong demand for goods and extremely thin inventories at businesses, dragged down mostly due to supply chains bottlenecks.  It is a strong end to 2021 for the goods-producing sectors of the US economy. Manufacturing output rose 0.7%MoM in November, in line with expectations, while October’s growth was revised up to +1.4%MoM from +1.2%. Significantly, vehicle output posted a second consecutive rise – a +2.2%MoM gain after a 10.1% jump in October, which suggests some easing of supply chain strains.
  • Service sector activity accelerated less than expected in December. Initial jobless claims dropped more than expected for the week ended 11 December.
  • The Philadelphia Fed manufacturing index eased more than expected in December, indicating that the manufacturing sector remains strong despite soaring input costs. However, Kanas fed manufacturing index dropped more than expected in December.
  • The yield on benchmark government bonds rose on Wednesday. The yield on 2026 bond rose to 7.79%. Further, the yield on 2023 bond advanced to 5.14%, while that for the longer-dated 2030 issue rose to 9.43%.

In early trade on Friday 17th December 2021, the US dollar is trading higher against the South African rand at R15.9686, while the euro is trading higher at R18.0896.  The British pound has gained against the South African rand to trade at R21.2746.

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

  • The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 15 December 2021, the MPC voted by a majority of 8-1 to increase Bank Rate by 0.15 percentage points, to 0.25%. The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion.
  • News about the Omicron variant could not have arrived at a worse time for festive celebrations. As thoughts began turning to Christmas and the New Year, Omicron jumped out of nowhere and threatened to bring Santa’s sleigh crashing to a halt. “While the holiday season has not yet been hijacked, December’s headline score has slipped one point to -15 and the lack of cheer is evident. Both measures that look at how people see the coming year have slipped down one point for personal finances over the next 12 months and down one point for the wider economy during 2022.
  • The U.K. is open to agreeing interim solutions with the EU on the future of Northern Ireland in early 2022, a softening of its stance in a dispute that has overshadowed their post-Brexit relationship. The British government is willing to consider a staged approach where the two sides strike an interim agreement on the most acute problems in Northern Ireland, according to a person familiar with the U.K.’s position. Those issues include the bureaucratic burden faced by traders moving goods from the rest of the U.K. into Northern Ireland and the frequency of customs checks on food products.
  • In Germany, industrial sector slowed in December as stricter pandemic restrictions to curb the spread of the Omicron variant of Covid-19 dampened the service sector.
  • In the eurozone, manufacturing and service activity grew slower than expected following a surge in Covid-19 cases.  The European Central Bank is banking on ‘flexibility’ in continued monetary easing, confirming divergent approaches on inflationary threats compared with the US Federal Reserve and Bank of England. Amid a flurry of central banking policy announcements, the ECB said on 16 December it will scale back pandemic-related emergency asset purchases in line with higher inflation. But it will maintain, resulting in an overall throttling back of monetary ease, an older government bond-purchasing facility and flexibly reinvest maturing securities to help limit the danger of market turbulence.
  • The Franc eased lower against most currencies in the wake of December’s Swiss National Bank policy assessment but its recent appreciation is a long way from over, according to some economists, who say the SNB may have to intervene heavily next year to frustrate the Franc’s ascent. Switzerland’s Franc slipped against all major currencies except the Japanese Yen and Chinese Renminbi following Thursday’s SNB decision although the declines may have had more to do with an evident pick up in risk appetite on international markets than the central bank’s policy assessment.
  • The Bank of Japan kept monetary policy ultra-loose on Friday but dialed back emergency pandemic-funding, less than 48 hours after the U.S. Federal Reserve signaled an imminent end to stimulus as policymakers respond to soaring global inflation. The BOJ’s decision, underpinned by cautious optimism that the economic damage wrought by coronavirus crisis is gradually healing, puts it in line with major central banks’ moves to phase out crisis-mode policies. In a widely expected move, the BOJ on Friday maintained its short-term rate target at -0.1% and that for 10-year bond yields around 0%.
  • The Australian economy is gradually opening up on the back of high vaccination rates. Nonetheless, the coronavirus remains a key risk to the economy, as the new coronavirus variant Omicron shows that the pandemic is far from over. At the time of writing, Australia had already reported a number of cases of Omicron. The Department of Health indicates that the new variant is manageable and that the pause in plans to reopen borders has been decided on an “abundance of caution”. However, much is still uncertain with regard to Omicron.

In early trade on Friday 17th December 2021, the euro marginally slipped against the US dollar to trade at $1.1336, while it has marginally weakened against the British pound to trade at GBP0.8526.