LOCKDOWN LEVEL 1 Ver1 [ DAY 8]
TOTAL DAYS 348 – 7 HOURS 40 MINUTES
Vaccine rollout day 36 / J & J VACCINE DAY 24
By the close of trade on Friday 5th march 2021, the South African rand weakened against the US dollar.
- In the US, the economy created more jobs than expected in February as falling new COVID-19 infections and additional pandemic relief money from the government boosted hiring at restaurants and other services businesses.
- The White House on Sunday urged computer network operators to take further steps to gauge whether their systems were targeted amid a hack of Microsoft Corp’s Outlook email program, saying a recent software patch still left serious vulnerabilities. “This is an active threat still developing and we urge network operators to take it very seriously,” a White House official said, adding that top U.S. security officials were working to decide what next steps to take following the breach.
- Friday’s US market was the proverbial game of two halves, 10-year US Treasury yields making a new year-to-date high immediately following the stronger than expected 379k jump in US non-farm payrolls, and this is turn hurting equities at the open and supporting the USD. Yet equities stages an impressive afternoon come-back, in conjunction with Treasury yield falling back to end the day little changed, the S&P 500 up 3% from intra-day low to high to finish +2.0% and the NASDAQ and even more impressive 4% intra-day swing to end +1.6%. The BBDXY USD index gained 0.35% Friday to be up just under 1% on the week
- Unemployment rate fell in February. The trade deficit widened in January as goods imports jumped to a record high amid a sharp rebound in consumer spending.
- Senate Democrats passed their version of the near-$1.9 trillion American Rescue Plan Act Saturday afternoon, but not before making some major changes from the version of the bill passed by the House of Representatives last week. Some of the most notable changes between the two relief bills include dropping a provision to gradually increase the minimum wage to $15 per hour and reducing the number of people who will qualify for a $1,400 stimulus payment.
- U.S. Secretary of State Antony Blinken called for a 90-day reduction in violence in Afghanistan and a new United Nations-led peace effort as he warned the United States could withdraw all forces after May 1, according to a letter to Afghan President Ashraf Ghani reported by several news outlets Sunday.
- The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.57%. Further, the yield on 2023 bond advanced to 5.37% while that for the longer-dated 2030 issue rose to 9.29%.
In early trade on Monday, the US dollar is trading higher against the South African rand at R15.3822, while the euro is trading marginally lower at R18.3233. The British pound has declined against the South African rand to trade at R21.2472.
By the close of trade on Friday, the euro declined against most of the major currencies.
- A busy week ahead for European economics with the ECB press conference and rate statement. Are changes to economic policy coming to halt steepening yields? In the US, CPI data is released, gauging the effects of inflation. The Bank of Canada will also be making its overnight rate statement, and a strong economic outlook for Canada could mean a change in bond-buying policy.
- The United Kingdom lost market share in the United States, Germany and China during the COVID-19 pandemic due to global trade chaos, Brexit and poor productivity, according to new research published on Monday. The United Kingdom performed particularly badly due to a long-term stagnation in productivity growth, according to the report by Aston University’s Lloyd’s Banking Group Centre for Business Prosperity. While all countries grappled with the tumult of COVID-19, the United Kingdom lost market share in its biggest export markets – the United States and Germany, the research showed.
- German factory orders rose more than expected in January as robust foreign demand more than offset domestic weakness in Europe’s largest economy.
In early trade on Monday, the euro has slipped against the US dollar to trade at $1.1926, while it has gained against the British pound to trade at GBP0.8626.
LOCKDOWN LEVEL 1 Ver1 [ DAY 1]
TOTAL DAYS 341 – 7 HOURS 45 MINUTES
Vaccine rollout day 28 / J & J VACCINE DAY 15
By the close of busines on Friday 26th February 2021, the South African rand weakened against the US dollar.
- President Ramaphosa took to his 3 weekly Television slot, to announce to the Republic that were now over the second wave and that we were now on an Alert level 1 with softened restrictions and shorter curfew.
- Israel hit several Iranian targets as Iranian rebels targeted an IDF warship in the sea of Oman. The Iranians have also rebuffed the US attempts to get around the nuclear negotiating table. A spokesman for Iran’s Foreign Ministry said on Sunday that conditions are not ripe for informal nuclear talks between Iran, the U.S. and other world powers. The Biden administration had proposed the talks as part of its efforts to negotiate a path back to the 2015 nuclear deal. The White House expressed disappointment with Iran’s response, but said it remained willing to engage with Tehran. Temperatures in the region are nearing boiling point.
- Concerns that domestic inflation could begin rising too quickly as more stimulus is pumped into the economy, even as the recovery from the coronavirus pandemic seems on track.
- In the US, trade deficit widened in January. More than 150 top business executives from some of the largest American companies across multiple industries voiced their support for President Joe Biden’s $1.9 trillion relief package and $1,400 stimulus checks. In a letter addressed to bipartisan congressional leaders sent Wednesday, the group of senior executives urged Congress to “act swiftly” and approve more relief to help improve the U.S. economy. “Previous federal relief measures have been essential, but more must be done to put the country on a trajectory for a strong, durable recovery.
- Meanwhile, consumer spending increased by the most in seven months in January, as the government doled out more pandemic relief money to low-income households and new COVID-19 infections dropped, thus positioning the economy for faster growth in the first quarter.
- The yield on benchmark government bonds mostly rose on Friday. The yield on 2026 bond rose to 7.36%. Further, the yield on 2023 bond declined to 5.24%, while that for the longer-dated 2030 issue rose to 9.04%.
In early trade on Monday, the US dollar is trading lower against the South African rand at R15.0266, while the euro is trading lower at R18.15285. The British pound has declined against the South African rand to trade at R21.0147.
By the close of trade on Friday, the euro declined against most of the major currencies.
- Businesses in the Japanese manufacturing sector signalled the first improvement in operating conditions since April 2019 in February. The higher headline PMI® reading was supported by modest expansions in both output and new order inflows. That said, manufacturers commented that supply chain disruption caused by the coronavirus disease 2019 (COVID-19) pandemic contributed to a sharp rise in input prices. As a result, input cost inflation rose to the fastest for two years. Nonetheless, businesses remained optimistic that production would rise over the coming 12 months.
- In the UK, the vaccination programme against COVID-19 entered a new phase as the National Health Service (NHS) will begin contacting all over-60s to book their jabs at the nearest vaccination centre or with a general practitioner (GP) or pharmacy.
- Australia’s central bank signaled it will not shirk from its yield target and quantitative easing programs designed to hold down borrowing costs and keep a lid on the currency. Yet, the bond market shows no indication of taking a backward step. Reserve Bank Governor Philip Lowe and his board are likely to focus Tuesday’s meeting on their response to a global reflation trade that’s proving a major challenge for central banks. Chinese investment in Australia plunged almost two-thirds last year to less than US$1 billion as the impact of coronavirus was compounded by increasingly fraught relations. The new figure marks the fourth straight annual drop and is just a fraction of the US$13 billion injected into the country in 2016, with Canberra growing increasingly wary. Data from the Australian National University (ANU) released on February 28 showed direct investment plunged to US$800 million last year, from just over US$2 billion in 2019.
In early trade on Monday, the euro advanced against the US dollar to trade at $1.2093, while it has weakened against the British pound to trade at GBP0.8622.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 27]
Wave 2 NEW VARIANT
TOTAL DAYS 334 – 7 HOURS 44 MINUTES
Vaccine rollout day 21 / J & J VACCINE DAY 8
By the close of trading on Tuesday 23rd February 2021, the South African rand strengthened against the US dollar.
- In South Africa, the unemployment rate jumped to a record high in the fourth quarter of last year, as the domestic economy was further battered by the COVID-19 pandemic.
- Today the focus shifts to the Budget speech and the troubled waters that Tito Mboweni must navigate.
- In the US, consumer confidence rose to a three-month high in February, after the US government stepped up its fiscal stimulus payments to families and domestic coronavirus cases fell sharply.
- Federal Reserve Chairman Jerome Powell signaled that the central bank was nowhere close to pulling back on its support for the pandemic-damaged U.S. economy even as he voiced expectations for a return to more normal, improved activity later this year. “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” he said in the text of testimony to be delivered Tuesday to the Senate Banking Committee.
- The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.09%. Further, the yield on 2023 bond advanced to 5.10%, while that for the longer-dated 2030 issue fell to 8.82%.
In early trade on Wednesday, the US dollar is trading higher against the South African rand at R14.5672, while the euro is trading higher at R17.6722. The British pound has gained against the South African rand to trade at R20.6326.
By the close of trade on Tuesday, the euro declined against most of the major currencies.
- In the eurozone, the consumer price index (CPI) remained steady on an annual basis in January.
- Europe’s top banks must justify why they should not have to shift clearing of euro-denominated derivatives worth billions of euros from London to the European Union after Brexit. Clearers in Britain have EU permission to continue clearing for EU customers until mid-2022 to give banks time to shift their euro positions to the continent, but switching has been slow. The banks are being asked to set out detailed views on shifting euro derivatives positions from London on Friday in the first meeting of a new European Commission working group on moving euro clearing.
- Godwin Emefiele has reiterated the position of the Central Bank of Nigeria (CBN) that cryptocurrency currently has no place in Nigeria’s monetary system. The apex bank earlier in February directed Deposit Money Banks and other financial institutions to close accounts of people using their systems for cryptocurrency trading. Nigerian senators a week later invited the Emefiele to explain the reasons for the ban and Nigeria’s future plan for virtual assets.
In early trade on Wednesday, the euro has marginally advanced against the US dollar to trade at $1.2166, while it has weakened against the British pound to trade at GBP0.8622.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 19]
Wave 2 NEW VARIANT
TOTAL DAYS 327 – 07 HOURS 40 MINUTES
Vaccine rollout day 17
By the close of trade on Monday 15th February 2021, the South African rand strengthened against the US dollar.
- A drop in new coronavirus infections in many countries across the world boosted emerging-market assets.
- Locally the ANC is facing it’s own demons as Former President Zuma faces jail time or a fine for snubbing the Zondo Commission. The commission chair Deputy Chief Justice Raymond Zondo has said the commission will push for Jailtime. Added to this crisis is the party nr 3 Ace Magashule who is headed to the Bloemfontein court this Friday for corruption. The ANC policy of step aside until you are pronounced guilty is under fire. In the US former president Donald Trump survived his second impeachment trial as the voting process came up short at 57 – 43 in favor of impeachment. Seven republican senators voted in favor of the impeachment succeeding. President Biden will now look to the Senate getting on with the business of the day and first up some key confirmations, notably the Attorney General.
- Temperatures in Houston fell to as low as -11C on Monday, with an inability to keep up with energy demand prompting rolling blackouts, production in parts of the shale oil basin in Texas curtailed and now the biggest US oil refinery, in Port Arthur (Texas not Tassie) shut down. News of the Arctic snap saw crude oil futures up +/ – 2% during our time zone yesterday, WTI rising above $60 for the first time since January 2020 and Brent pushing above $63. At the start of this month WTI was trading around $52 and Brent $56, gains since then and prior to yesterday supported by anticipation of stronger demand.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 6.77%. Further, the yield on 2023 bond advanced to 4.70%, while that for the longer-dated 2030 issue rose to 8.54%.
In early trade on Tuesday, the US dollar is trading lower against the South African rand at R14.4234, while the euro is trading lower at R17.5166. The British pound has gained against the South African rand to trade at R20.1125.
By the close of trade on Monday, the euro declined against most of the major currencies.
- New Italian Prime Minister Mario Draghi is already transforming the political scene in Rome and causing stock markets to surge. In the wake of fresh political chaos, the former European Central Bank president was called upon to become Italy’s new leader and rescue its turbulent economy. His arrival has been described as “better than expected” after gathering widespread political support and stemming the threat of populist forces. Draghi, who was sworn in on Saturday, presented his Cabinet over the weekend — a group made up mostly of politicians from different parties and some technocrats in key ministries.
- Perhaps looking to be lighthearted, or perhaps just looking for something to do in between printing more money, the ECB took to their Twitter account on Valentine’s Day to Tweet out a love poem about monetary policy. While some would just write this off as a bit of PR or some good-natured spin in order to acknowledge the holiday, the Tweet instead backfired in a big way. It prompted over 2,000 responses, many of which seemed to be critical not just of the ECB’s attempt at making a joke, but also at their larger ongoing failure of monetary policy as a whole.
- The UK will release inflation and retail data this week, and unsurprisingly with the country stuck in lockdown, both are likely to be relatively depressed. Headline CPI will remain heavily constrained by energy prices, while more timely spending data points to a post-Christmas 4% fall in retail sales. But with reflation becoming a key theme in financial markets, it’s a good time to ask, will the UK see price pressures re-emerge as the country reopens? Strictly speaking, yes. Headline inflation is likely to be back to 2% by the end of 2021, though unsurprisingly a lot of that is down to energy.
- The eurozone industrial production fell more-than-expected on a monthly basis in December and the trading bloc’s trade surplus widened in December.
- Japan’s GDP (growth domestic product) surprised to the upside in Q4 on Monday, rising 12.7% versus 9.5% forecast, up from 22.9% prior. This also saw the annualised rate rise to 3% compared with 2.3% forecast, although down from 5.3% in Q3. Strong exports and a rebound in capital expenditure were the main divers behind the positive headline figures. It also means Japan are the latest Asian country to perform better than expected during their recovery, following Singapore and Thailand’s upside GDP surprises.
In early trade on Tuesday, the euro advanced against the US dollar to trade at $1.2232, while it has weakened against the British pound to trade at GBP0.8766.
LOCKDOWN ADJUSTED LEVEL 3 Ver1 [ DAY 21]
Wave 2 NEW VARIANT
TOTAL DAYS 301 – 07 HOURS 55 MINUTES
By the close of trade on Wednesday 20th January 2021, the South African rand had strengthened against the US dollar. In the USA history was made at the inauguration of Joseph R. Biden with the first lady of color being sworn in as the Vice president. The records tumbled as Biden became the oldest President to take office in the White House. This was only the second inauguration where the outgoing President snubbed the inauguration and flew home to his West Palm beach resort the Mar-a-Lago. The inauguration was on heavy lockdown with limited guests due to heightened security and Covid-19.
- In South Africa, on the data front, the consumer price index (CPI) fell to its lowest rate on an annual basis in more than a decade in 2020, as the Covid-19 pandemic put a pressure on consumer spending as well as on fuel prices.
- In the US, Joe Biden was sworn in as the 46th US President, with a vow to wrestle the ailing economy from the clutches of the pandemic and end a tumultuous four years under the Trump administration. The incoming President also spoke of the need for unity, while pledging to fight for racial justice and to reject extremists and white supremacy. Biden laying down the law right off the bat with his team at The White House letting them know he won’t hesitate to fire any one of them if he catches them disrespecting or talking down to a colleague. The new President was swearing in his political appointees when he dropped the hammer and threw some shade at the previous administration at the same time saying people getting treated with “decency and dignity” has been missing the past 4 years.
- In one of the many Executive Orders Biden signed hours after his inauguration, the leader of Canada’s oil heartland called President Joe Biden’s decision to cancel the Keystone XL pipeline project an “insult” and urged Prime Minister Justin Trudeau to consider retaliation. “This is a gut punch to the Alberta and Canadian economies,” Alberta Premier Jason Kenney said in a press conference Wednesday. “It’s an insult.” Last year, Kenney’s government invested $1.1 billion of taxpayer money to jump-start construction of the pipeline that would carry more than 800,000 barrels a day of crude from Alberta’s oil sands as far south as the U.S. Gulf Coast. Kenney said he was calling on Prime Minister Justin Trudeau to sit down with the new administration, suggesting that the federal government impose trade and economic sanctions should those efforts be refused.
- Equity and currency traders welcomed the new Administration with fresh records for the S&P 500 and Nasdaq. The peaceful transition allowed investors to turn their focus to President Biden’s 100 day agenda which includes aggressive promises for more stimulus and broader vaccine distribution, the two most important ingredients for a 2021 recovery. The greenback sold off against all of the major currencies with the exception of euro and Swiss Franc because more spending and a larger fiscal deficit is bearish for the dollar.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 6.57%. Further, the yield on 2023 bond declined to 4.45% while that for the longer-dated 2030 issue fell to 8.74%.
In early trade on Thursday, the US dollar is trading lower against the South African rand at R14.8766, while the euro is trading marginally lower at R18.048. the British pound has marginally declined against the South African rand to trade at R20.3572.
By the close of trade on Wednesday, the euro declined against most of the major currencies.
- Meanwhile, German producer price index (PPI) rose more than expected on a monthly basis in December.
- In the UK, CPI rose on a monthly basis in December, starting what is expected to be a climb this year as pandemic-fighting measures, Brexit and a recovery in the economy combine to push up costs for consumers and businesses. Firms are generally well prepared and the government has already rolled over most non-EU trade deals. And while there may be some temporary frictions at the border, they pale in comparison to the near-term uncertainty around the economic effects of COVID-19 and the speed of the vaccination distribution.
In early trade on Thursday, the euro has advanced against the US dollar to trade at $1.2166, while it has marginally weakened against the British pound to trade at GBP0.8832.