LOCKDOWN LEVEL 1 [Curfew Removed]

TOTAL DAYS 644 – 07 HOURS 40 MINUTES

Vaccine rollout day 287
New cases 4379
New Deaths 30
Recovery Rate 92,1%
Vaccines Administered 27,977,830

As of today the cumulative number of COVID19 cases identified in SA is 3 472 436  with 4 379 new cases reported. Today 30 deaths have been reported bringing the total to 91 228 deaths. The cumulative number of recoveries now stand at 3 197 017 with a recovery rate of 92.1%

Welcome to 2022. There’s no rest for the wicked this week. We start with the key US jobs report. After the labour sector ended 2021 on a down note, will this week’s nonfarm payrolls print give us reasons to be cheerful? Be on the lookout for the latest Fed minutes following the FOMC’s decision to accelerate tapering as well as OPEC-JMMC meetings in the wake of higher Omicron cases worldwide. Nonfarm payrolls US jobs market to start 2022 on the front foot? A new year brings with it a new nonfarm payrolls print. Friday January 7th’s release will be reporting jobs data for December 2021.

By the close of trade on Friday 31st December 2021, the South African rand weakened against the US dollar.

  • In the US, a surge in the Covid-19 Omicron variant cases has led to top Federal Health officials looking to add a negative test along with its five-day isolation restrictions for asymptomatic individual who catch the coronavirus.
  • Troubled Chinese property giant Evergrande’s shares have been suspended from trading on the Hong Kong stock exchange. The company did not give a reason for the halt. The news came after Chinese media reported that Evergrande had been ordered to demolish 39 luxury apartments on the tropical island of Hainan within 10 days. It is reported that the apartments are worth about 7.7 billion yuan ($1.7 billion). The Ocean Flower Island project, a mega-resort under development by Evergrande, consists of three reclaimed Islands in Danzhou in Hainan province.
  • China added $16.7 billion in foreign debt in the third quarter of 2021 due in part to increased purchases of onshore yuan-denominated bonds by foreign investors. About 47% of China’s outstanding debt of $2.7 trillion at the end of September are medium to long-term obligations, up three percentage points from the end of June, Wang Chunying, deputy director and spokesman of the State Administration of Foreign Exchange, said in a statement released on Friday.
  • Sudan’s Prime Minister Abdalla Hamdok has announced his resignation just weeks after he was reinstated in a controversial deal with the military. The army seized power in October and put Mr Hamdok under house arrest, but he was reinstated following a power-sharing deal with the coup’s leader. Protesters rejected the deal, demanding an entirely civilian political rule. His resignation followed another day of protests, where medics said at least two were killed.
  • President Joe Biden reaffirmed U.S. support for Ukraine’s sovereignty on Sunday in a call with the country’s president, Volodymyr Zelenskiy. Biden said the U.S. and its allies and partners “will respond decisively if Russia further invades Ukraine,” according to a statement from White House Press Secretary Jen Psaki. The leaders expressed support for diplomatic efforts through a series of meetings starting next week with the bilateral Strategic Stability Dialogue, at NATO through the NATO-Russia Council, and at the Organization for Security and Cooperation in Europe, she said.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.83%. Further, the yield on 2023 bond declined to 5.13% while that for the longer-dated 2030 issue fell to 9.34%.

In early trade on Monday 3rd January 2022, the US dollar is trading higher against the South African rand at R15.9736, while the euro is trading lower at R18.1186.  The British pound has declined against the South African rand to trade at R21.5636.

By the close of trade on Friday, the euro advanced against most of the major currencies.

  • The new year got off to a mixed start on Monday in holiday-thinned Asian trade, following a healthy run-up at the end of last week, with some cheer provided by data suggesting regional economies improved last month. However, investors remain shackled by concerns about a range of issues including the fast-spreading Omicron variant, inflation, the removal of central bank stimulus and geopolitical tensions. While the last few months of 2021 were marked by uncertainty on trading floors, global stocks enjoyed blockbuster rallies in 2021 as economies reopened and lives in most countries returned to some semblance of normality.
  • In eurozone and Germany, investors await the release of manufacturing activity data for December.
  • Prime Minister Scott Morrison urged Australians to remain calm and to not be alarmed about the sharp rise in cases and hospitalisations figures. The national number of COVID-19 hospitalisations is approaching 2,000 with 1,963 noted on Monday, after the 1,769 tally on Sunday. New South Wales accounts for the majority of those numbers with 1,204 people hospitalised with the virus on Monday. With more than 2,500 health workers furloughed, the health system is coming under increasing strain.

In early trade on Monday 3rd January 2022, the euro slipped against the US dollar to trade at $1.1358, while it has weakened against the British pound to trade at GBP0.8424.

FROM ALL OF US AT THE STEWARDS FOREX DESK WE WISH YOU A GREAT 2022

LOCKDOWN LEVEL 1 [Curfew Removed]

TOTAL DAYS 641 – 07 HOURS 30 MINUTES

Vaccine rollout day 284
New cases 12 979
New Deaths 126
Recovery Rate 91,7%
Vaccines Administered 27,955,112

As of today the cumulative number of COVID19 cases identified in SA is 3 446 532 with 12 979 new cases reported. Today 126 deaths have been reported bringing the total to 91 061 deaths. The cumulative number of recoveries now stand at 3 159 143 with a recovery rate of 91,7%.  The Government on New Years Eve has removed the curfew.

By the close of trade on Thursday 30th December 2021, the South African rand strengthened against the US dollar.

  • In South Africa, the government made changes to the Alert Level 1 regulations approved by the Cabinet after meetings of the National Coronavirus Command Council (NCCC) and the country’s President’s Co-ordinating Council.
  • In the US, new claims for unemployment benefits fell in the week ended 24 December, indicating towards no impact of the Omicron variant of coronavirus on domestic employment. The Chicago Fed purchasing managers index (PMI) rose more than market expectations in December.
  • The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the second quarter, hobbling along a 26-year low for the past four quarters, according to the IMF’s COFER data released today. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks.
  • China’s December factory activity unexpectedly accelerated despite disruptions from COVID outbreaks and as the economy loses momentum in the fourth quarter, according to an official survey released on Friday. The official manufacturing Purchasing Manager’s Index (PMI) rose to 50.3 in December from 50.1 in November, data from the National Bureau of Statistics (NBS) showed.
  • Markets have been dead quiet during the holiday period but the upcoming week is guaranteed to bring increased volatility. The nonfarm payrolls report along with the FOMC minutes and a host of other US data are bound to wake markets up, while employment and inflation numbers out of Canada and the Eurozone, respectively, should also liven things a little. Although several major pairs have been rebounding against the US dollar and Wall Street has been notching up one record high after another, the incremental moves have been modest. That could all change in the next few days.
  • America’s latest report on unemployment benefits is proof that the US jobs recovery is still in full-swing. The average number of weekly jobless benefits claims over the past four weeks fell to 199,250. That’s the lowest four-week moving average since October 1969, the Labor Department reported Thursday. Last week alone, claims stood at 198,000, adjusted for seasonal swings. That was slightly less than economists had predicted but above the pandemic-era low. The number of continued claims, counting workers who have applied for benefits for at least two consecutive weeks, stood at 1.7 million in the week.
  • JPMorgan Chase & Co., UBS Group AG and other global banks are subject to U.S. jurisdiction for allegedly manipulating the London Interbank Offered Rate, the federal appeals court in New York ruled. A three-judge panel ruled Thursday that U.S. courts can exercise “conspiracy jurisdiction” over the banks if other members of the conspiracy took steps to advance the scheme from within the U.S. The appeals court reversed a 2016 ruling by U.S. District Judge Naomi Reice Buchwald, who dismissed claims on the ground that her court lacked jurisdiction over the bank defendants.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.87%. Further, the yield on 2023 bond advanced to 5.16%, while that for the longer-dated 2030 issue rose to 9.40%.

In early trade on 31st December 2021, the US dollar is trading higher against the South African rand at R15.9566, while the euro is trading marginally higher at R18.0542. The British pound has gained against the South African rand to trade at R21.5376.

By the close of trade on Thursday 30th December 2021, the euro declined against most of the major currencies.

  • Germany will on 4 January drop its demand for traveler’s from the UK to quarantine and provide a negative COVID-19 test, requirements that were imposed earlier in December during a surge of the Omicron coronavirus variant.
  • Santander accidentally paid out $175 million to thousands of accounts on Christmas Day in a massive blunder. Approximately 75,000 Brits or their companies received a second wage or supplier payment from Santander account holders on December 25. The blunder meant some big corporations paid wages twice, The Times reports. The money was sent to Brits with Barclays, HSBC, NatWest, Co-operative Bank and Virgin Money accounts. Santander must now launch cross-company talks to get the funds back – as bosses fear the money has already been spent by some account holders.
  • South Korea’s central bank governor on Friday (Dec 31) said policy interest rates will need to be adjusted as an economic recovery takes shape in 2022, suggesting further tightening is in the pipeline as price pressures build. “The degree of monetary policy easing will be adjusted appropriately in line with the improvement of economic conditions,” Bank of Korea Governor Lee Ju-yeol said in a speech ahead of the New Year.

In early trade on Friday 31st December 2021, the euro slipped against the US dollar to trade at $1.1326, while it has marginally weakened against the British pound to trade at GBP0.8396.

From the Forex Team at Stewards, we wish you all the best for 2022

LOCKDOWN LEVEL 1

TOTAL DAYS 633 – 07 HOURS 36 MINUTES 

Vaccine rollout day 283
New cases 15 465
New Deaths 3
Recovery Rate 91,0%
Vaccines Administered 27,521,386

As of today the cumulative number of COVID19 cases identified in SA is 3 308 074 with 15 465 new cases reported. Today 3 deaths have been reported bringing the total to 90 348 deaths. The cumulative number of recoveries now stand at 3 010 513 with a recovery rate of 91.0%

By the close of trade on Friday, the South African rand strengthened against the US dollar.

  • In the US, the Federal Reserve (Fed) stated that an interest rate increase will likely be necessary “shortly after” the Fed tapers its bond purchases in March 2022, and the central bank will also begin reducing its bond holdings as soon as the summer to attack “alarmingly high” inflation.
  • U.S. Senator Joe Manchin, a moderate Democrat who is key to President Joe Biden’s hopes of passing a $1.75 trillion domestic investment bill, said on Sunday he would not support the package. “I cannot vote to continue with this piece of legislation,” Manchin said during an interview with the “Fox News Sunday” program, citing concerns about inflation. “I just can’t. I have tried everything humanly possible.” The comments drew immediate outrage from liberal Democrats and Senator Bernie Sanders, a democratic socialist who helped shape the bill and called for a vote to be held on the measure despite Manchin’s opposition.
  • Bond traders suspect the Federal Reserve will quickly discover it’s being too ambitious with its newly hawkish stance. The Federal Open Market Committee just forecast overnight rates jumping from zero currently to 1.60% and 2.10% by year-end 2023 and 2024, respectively. Traders see it differently, with Eurodollar futures contracts pricing in 1.50% short-term rates on both dates. The concern is that the economy won’t be able to handle the loftier rates policy makers have in mind, which limits how far central bankers can raise interest rates and how high Treasury yields can go.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.64%. Further, the yield on 2023 bond declined to 5.08%, while that for the longer-dated 2030 issue fell to 9.28%.

In early trade on Monday 20th December 2021, the US dollar is trading higher against the South African rand at R15.9326, while the euro is trading higher at R17.9264.  The British pound has gained against the South African rand to trade at R21.0736.

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

  • Boris Johnson was dealt another major blow to his leadership on Saturday night as it emerged that the man overseeing Brexit was resigning from the cabinet. With Tory MPs already warning the prime minister that he would have to regain control of the government to survive as leader until the next election, it emerged that Lord Frost is to leave the government after frustrations over Brexit negotiations and broader concerns over the government’s Covid policies and tax increases.
  • In Germany, business climate deteriorated amid persistent supply constraints and COVID-19 pandemic restrictions. Moreover, current assessment and business expectations worsened in December. The producer price index (PPI) advanced in November; however, it was lower than market expectations.
  • Leading epidemiologists are urging a rethink of Australia’s current reopening plans as case numbers of the Omicron variant surge. On Sunday leading experts, including John Kaldor, and Greg Dore, epidemiologists at the Kirby Institute, and Professor Sharon Lewin, director of the Doherty Institute, published an opinion piece in the Sydney Morning Herald calling for a return to restrictions “for a few weeks” while the country gets more information on Omicron’s severity and ability to evade vaccines.
  • In the eurozone, the consumer price index (CPI) rose less than expected in November.
  • In the UK, retail sales accelerated faster than expected in November, buoyed by Black Friday discounts, early Christmas shopping and no lockdown restrictions.
  • President Recep Tayyip Erdogan pledged to continue interest rate cuts that have made the Turkish lira the world’s worst performing currency over the past three months, referring to Islamic proscriptions on usury as a basis for his new policy push.

In early trade on Monday 20th December 2021, the euro advanced against the US dollar to trade at $1.1262, while it has gained against the British pound to trade at GBP0.8548.

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.

LOCKDOWN LEVEL 1

TOTAL DAYS 630 – 07 HOURS 30 MINUTES 

Vaccine rollout day 280
New cases  23 884
New Deaths  24
Recovery Rate 91,8%
Vaccines Administered 27,304,475

As of today the cumulative number of COVID19 cases identified in SA is 3 204 642 with 23 884 new cases reported. Today 24 deaths have been reported bringing the total to 90 172 deaths. The cumulative number of recoveries now stand at 2 943 670 with a recovery rate of 91,8%.  Outrage is building among SA’s world-class scientists over the apparent impromptu arrival of a delegation of Russian scientists in the country on Monday with some privately voicing fears that they are here on a mission to undertake a brazen “data grab” to bolster efforts to secure regulatory approval for the Russian-made Sputnik V Covid-19 vaccine.

New data from South Africa and Europe hint that Omicron cases are poised to explode in the U.S., where the vast majority of the population isn’t well protected against infection.  A new analysis by South Africa’s largest private insurer Discovery Health paints a picture of Omicron’s clinical risk. Two doses of Pfizer’s vaccine appear to be significantly less effective against severe disease with Omicron than previous variants, but the variant is less likely to lead to hospitalization in adults than the original version. Everything points to a large wave. Buckle up USA!

By the close of trade on Tuesday 14th December 2021, the South African rand weakened against the US dollar.

  • In the US, producer price index (PPI) surged more than expected in November, strengthening views that the inflation will remain high for a longer time. The small business owners’ sentiment boosted slightly in November, however firms continued to grow doubtful on future economic conditions.
  • US Senate votes to raise Debt Limit by $2.5Tln, now goes to the House.
  • The Federal Reserve is expected to announce a dramatic policy shift Wednesday that will clear the way for a first interest rate hike next year. Markets are anticipating the Fed will speed up the wind-down of its bond buying program, changing the end date to March from June. That would free the central bank to start raising interest rates from zero, and Fed officials are expected to release a new forecast showing two to three interest rate hikes in 2022 and another three to four in 2023. Previously, there had been no consensus for a rate hike in 2022, though half of the Fed officials expected at least one. There is a pretty strong consensus forming that the Fed is going to increase the pace of the taper at their next meeting. But they haven’t so much agreed on how much that increase will be. That allows for some wiggle-room in market forecasts. So, we could have a larger market reaction to the data, and this could be more pronounced in light of the circumstances. Last Friday, the market had a modestly positive reaction to record CPI data.
  • After a bruising couple of strong yuan months, that saw some efforts at devaluation in early December, expectations are for China’s avalanche of macro data to continue to show the Chinese economy sliding.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 7.77%. Further, the yield on 2023 bond advanced to 5.13% while that for the longer-dated 2030 issue fell to 9.39%.

In early trade on Wednesday 15th December 2021, the US dollar is trading marginally higher against the South African rand at R16.0896, while the euro is trading marginally higher at R18.1187.  The British pound has marginally gained against the South African rand to trade at R21.2886.

By the close of trade on Tuesday 14th December 2021, the euro declined against most of the major currencies.

  • In the eurozone, industrial production advanced in October, but supply chain constraints continue to pressure.

In early trade on Wednesday 15th December 2021, the euro marginally advanced against the US dollar to trade at $1.136, while it has marginally weakened against the British pound to trade at GBP0.862.

Tomorrow is day of Reconciliation.  May I take this opportunity on behalf of Stewards Financial Custodians to wish you, your families and friends a safe and festive season.  May the 2022 deliver on all our hopes and aspirations.