Vaccine rollout day 44 / J & J VACCINE DAY 32   

 By the close of trade on Tuesday 16th March 2021, the South African rand weakened against the US dollar. Tonight the Zulu King Goodwill Zwelithini will be “planted” in a secret ceremony afforded to Monarchs in an undisclosed area around his palace in Nongoma, Northern KZN.

  • In a week with heavy data, Wednesday’s Federal Reserve monetary policy announcement will be the most important event risk. The Fed is set to update its economic projections and their outlook for interest rates. Chairman Powell will hold his usual press conference where he will undoubtedly be peppered with questions about yields. The U.S. dollar shrugged off the February retail sales report and consolidated its gains ahead of the rate decision. The greenback avoided losses against most of the major currencies.
  • Coronavirus fears shook Wall Street to its core last March. The Dow crashed nearly 3,000 points — a stunning 13% — a year ago today. Flash forward 12 months and the health crisis is not over, but investors are increasingly confident it soon will be. For the first time since February 2020, Covid-19 is no longer the No. 1 fear among portfolio managers surveyed by Bank of America, the bank said Tuesday. If anything, experienced investors are now concerned that the economy could recover so rapidly that it overheats. Inflation is now the top risk cited by portfolio managers polled by Bank of America.
  • In the US, retail sales fell more than expected in February, on account of excessively cold weather across the country. However, a rebound is likely as the US government disburses another round of pandemic relief money to mostly lower and middle-income households.
  • Industrial production plunged in February, depressed by winter storms in Texas, which put some petroleum refineries, petrochemical facilities and plastic resin plants out of commission for the rest of that month.
  • The United States is expected to unveil sanctions on Russia as soon as next week over its alleged meddling in the 2020 U.S. presidential election, CNN reported on Tuesday. Iran will also likely face sanctions, CNN reported, citing anonymous U.S. officials. U.S. intelligence officials said in a report released on Tuesday that Russian President Vladimir Putin knew of and likely directed a Russian effort to manipulate the U.S. presidential campaign to benefit former President Donald Trump with “misleading or unsubstantiated allegations” against challenger Joe Biden.
  • Iran has started enriching uranium at its underground Natanz plant with a second type of advanced centrifuge, the IR-4, the U.N. nuclear watchdog said in a report reviewed by Reuters on Tuesday, in a further breach of Tehran’s deal with major powers. Iran has recently accelerated its breaches of the deal’s restrictions on its nuclear activities in an apparent bid to pressure U.S. President Joe Biden as both sides are locked in a standoff over who should move first to save the deal. Tehran’s breaches began in 2019 in response to the U.S. withdrawal from the deal and the reimposition of U.S. economic sanctions
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.31%. Further, the yield on 2023 bond declined to 5.31%, while that for the longer-dated 2030 issue fell to 9.19%.

In early trade on Wednesday, the US dollar is trading higher against the South African rand at R14.8980, while the euro is trading higher at R17.7366.  The British pound has gained against the South African rand to trade at R20.6966.

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

  • Meanwhile, investor sentiment in Germany increased by more than expected in March, buoying the outlook for a broad-based recovery in Europe’s largest economy. A separate gauge of current conditions also improved in March.  On the covid-19 front Germany reported +13,435 new cases and +249 new deaths.
  • Japanese exports fell much faster than expected in February as U.S. and China-bound shipments weakened, a source of concern for the world’s third-largest economy as it tries to prop up growth. The prospects for a U.S. recovery may ease concerns about the outlook for Japan’s economy, however, which is seen slowing in the current quarter due to new COVID curbs that have hit service-sector activity. Ministry of Finance data out on Wednesday showed Japanese exports fell 4.5% year-on-year in February, hurt by decline in U.S.-bound shipments of automobiles.

In early trade on Wednesday, the euro has marginally slipped against the US dollar to trade at $1.1922, while it has marginally gained against the British pound to trade at GBP0.8572.