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 2]
TOTAL DAYS 341 – 7 HOURS 25 MINUTES
Vaccine rollout day 29 / J & J VACCINE DAY 16
By the close of trade on Monday1st March 2021, the South African rand strengthened against the US dollar.
- South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) expanded at a faster pace in February, supported by an increase in new sales and business activity.
- In the US, ISM Manufacturing PMI increased to a three-year high in February, amid a surge in new orders, but factories continued to face higher costs for raw materials and other inputs amid labour shortages as the COVID-19 pandemic drags on.
- Federal Reserve Board Governor, Lael Brainard stated that the coronavirus pandemic laid bare a number of weaknesses in the financial system that should be addressed with new rules to prepare for the next shock.
- The Biden administration is preparing to impose sanctions against Russia over the poisoning and jailing of opposition leader Alexey Navalny, according to three congressional aides briefed on the plans. The sanctions will be unveiled as early as Tuesday, the aides said, offering no specifics and describing the moves on condition of anonymity ahead of a formal announcement. The measures will involve the State, Treasury and Commerce Departments, according to one aide.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.24%. Further, the yield on 2023 bond declined to 5.20%, while that for the longer-dated 2030 issue fell to 8.96%.
In early trade on Tuesday, the US dollar is trading higher against the South African rand at R15.0527, while the euro is trading marginally higher at R18.1022. The British pound has marginally declined against the South African rand to trade at R20.8936.
By the close of trade on Monday, the euro declined against most of the major currencies.
- The Chinese embassy in Britain on Monday expressed grave concern over and strong opposition to British Foreign Secretary Dominic Raab’s wrong remarks about Hong Kong. “The UK side’s remarks confuse right and wrong, and interfere in China’s internal affairs and judicial sovereignty. The Chinese side expresses its grave concern and strong opposition,” said a spokesperson for the embassy in a statement. Over a recent decision to charge 47 people, the statement said the handling of this case by the Hong Kong judicial authorities is in line with the law and brooks no distortion or discredit.
- Australia has been riding the recent commodities boom. And if a super cycle does develop, it could be in for some substantial growth. But, there is a particular challenge that they have to overcome in the short term, which might put it behind other countries during the recovery. Australia was one of the slowest countries in the developed world to begin their COVID-19 vaccination program. In fact, the first jabs only started on Feb 22. Australia has secured orders for more than enough vaccines for their population. However, their schedule is more extensive than other nations.
- Central banks need to be prepared to act on inflation moving in either direction, according to former Bank of England Governor Mervyn King, who warned against excessive confidence that price growth will remain low. The recent rise in bond yields indicates that markets are aware of the risks, King said in a Bloomberg Television interview Monday.
- The eurozone factory activity increased in February, on account of soaring demand, although the burst of business led to a shortage of raw materials and a spike in input costs.
- German manufacturing PMI rose to its highest level in more than three years in February, brightening the outlook for Europe’s largest economy.
- Crude oil futures rallied in the Asian session before paring gains as the European session progressed as traders look ahead to the OPEC+ meeting this week. OPEC and allies meet on March 4th with market participants looking at a likely lower of output constraints.
In early trade on Tuesday, the euro slipped against the US dollar to trade at $1.2066, while it has gained against the British pound to trade at GBP0.8692.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 29]
Wave 2 NEW VARIANT
TOTAL DAYS 336 – 7 HOURS 45 MINUTES
Vaccine rollout day 23 / J & J VACCINE DAY 10
By the close of trade on Wednesday 24th February 2021, the South African rand strengthened against the US dollar.
- In the 2021 Budget speech, Finance Minister, Tito Mboweni reversed a decision to raise an extra R40.00bn ($2.80bn) over the next four years.
- He also allocated funds for COVID-19 vaccines and set more ambitious debt-consolidation targets, while sticking to a pledge to freeze state workers’ wages.
- Also, inflation-beating relief was announced for individuals, along with a 1 percentage point cut in corporate tax from April 2022.
- Mboweni’s speech was dotted with light hearted humor and quotes from the ages. Mboweni himself came up with a pearler “We must do more with less, in the hope that we can make more”.
- SIN tax was prominent with a rise in alcohol
- In the US, sales of new US single-family homes increased more-than-expected in January, boosted by historically low mortgage rates and an acute shortage of previously owned houses on the market.
- Federal Reserve Chairman, Jerome Powell stated that the central bank would keep its attention focused on getting Americans back to work as a COVID-19 vaccine-related recovery proceeds. It may take more than three years to reach the Federal Reserve’s inflation goals, a further signal the U.S. central bank plans to look beyond any post-pandemic spike in prices and leave interest rates unchanged for a long time to come. “We are just being honest about the challenge,” Powell told the House of Representatives Financial Services Committee when asked about Fed projections that inflation will remain at or below the central bank’s 2% target through 2023.
- Also in the US, retail sales are expected to grow this year between 6.5% and 8.2%, amounting to more than $4.33 trillion in sales, as the U.S. economy begins to reopen, and more and more individuals receive the Covid vaccine, the National Retail Federation said Wednesday. A preliminary reading shows that retail sales grew 6.7% to $4.06 trillion last year, the industry’s leading trade group said. That was largely boosted by nearly 22% growth online. Over the course of the year, more Americans turned to websites and apps to buy groceries, comfortable clothing and home goods.
- Democrats in the U.S. Senate have chosen to move forward with the next pandemic relief package using reconciliation. The arcane process that allows certain bills to circumvent the filibuster rules and pass with only 50 votes, not the typical 60. In light of this, Democrats have increased the estimate of the final size of the fiscal package to a range of $1.5 trillion to $1.9 trillion (likely closer to the higher end of that range). This means an increase in the U.S. growth forecasts for 2021.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.13%. Further, the yield on 2023 bond advanced to 5.17%, while that for the longer-dated 2030 issue fell to 8.80%.
In early trade on Thursday, the US dollar is trading higher against the South African rand at R14.5326, while the euro is trading higher at R17.6671. The British pound has gained against the South African rand to trade at R20.5466.
By the close of trade on Wednesday, the euro declined against most of the major currencies.
- Bank of England officials brushed aside suggestions that the economy is about to suffer from higher inflation anytime soon as it struggles with the fallout of the coronavirus pandemic. Answering questions from lawmakers on Wednesday, policy makers said data monitored by the central bank don’t show evidence of inflation overshooting its 2% target. A surge in household savings under lockdown has fueled speculation of a rapid increase in consumer demand as the government starts to unwind virus restrictions next month.
- German gross domestic product (GDP) rose more-than-market expectations, driven by strong exports and solid construction activity. However, stricter lockdown measures domestically and abroad are clouding the outlook for Europe’s largest economy.
- China’s centrally-administered state-owned enterprises (SOEs) are making growth plans for the 14th Five-Year period (2021-2025), with a focus on high-quality development to underpin broader economic and social development. The growth targets of China’s central SOEs will be specified once the country’s 14th five-year plan for economic and social development is approved by the top legislature, said Hao Peng, chief of the State-owned Assets Supervision and Administration Commission (SASAC), at a press conference on Tuesday.
In early trade on Thursday, the euro marginally advanced against the US dollar to trade at $1.2172, while it has marginally weakened against the British pound to trade at GBP0.8636.
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 22]
Wave 2 NEW VARIANT
TOTAL DAYS 330 – 7 HOURS 40 MINUTES
Vaccine rollout day 19 / j & j DAY 3
By the close of trade on Thursday 18th February 2021, the South African rand strengthened against the US dollar.
- The US Dollar weakened amid concerns about future inflation and signs of weakness in the US labour market.
- Treasury Secretary Janet Yellen said that US$1.9 trillion in pandemic-relief spending is still needed, despite recent strength in retail sales and record levels in U.S. stocks. “It’s very important to have a big package that addresses the pain this has caused,” Yellen said on CNBC Thursday. “The price of doing too little is much larger than the price of doing something big.
- White House COVD Advisor Andy Slavitt just said the Johnson and Johnson vaccine might not end up being a one dose vaccine. The company is testing, right now, the effectiveness with a booster.
- The post retail sales rally in the U.S. dollar did not last as the greenback resumed its slide against all major currencies on Thursday. This decline was somewhat surprising given the sell-off in U.S. stocks and rise in 10 year Treasury yields which typically coincides with a stronger dollar. However, the pullback was supported by economic data. While the Philadelphia Fed manufacturing index beat expectations, activity slowed from the previous month. Jobless claims also jumped from 793K to 861K last week. Building permits rose 10% but this improvement was offset by a drop in housing starts..
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond fell to 6.99%. Further, the yield on 2023 bond advanced to 4.81%, while that for the longer-dated 2030 issue rose to 8.75%.
In early trade on Friday, the US dollar is trading higher against the South African rand at R14.6422, while the euro is trading higher at R17.6812. The British pound has gained against the South African rand to trade at R20.4166.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- Japan’s 10-year government bond yield rises to 0.1%, highest since November 2018.
- The US is realising that it is impossible to change China through full-frontal antagonism. Instead, the relationship between the world’s leading economic powers must be based on a combination of co-operation and confrontation on key issues. In an OMFIF panel on 10 February, US experts agreed that the administration of President Joe Biden must first identify policies that can work and then intensify efforts, including by interacting with foreign allies, to achieve success.
- The eurozone consumer confidence picked up more-than-expected in February, despite continued economic lockdowns to curb the spread of the COVID-19 pandemic.
- A 250-billion-rupee ($3.5 billion) fund set up by India’s government to complete stalled housing projects is set to deliver its first finished apartments in 2021, offering a template for a problem that has washed out savings of thousands of home buyers and bankrupted developers. The fund will hand over some 16 projects or more than 4,000 homes in the financial year starting April 1, said Irfan A. Kazi, chief investment officer at SBICAP Ventures Ltd., the government-appointed manager of the alternative investment fund.
In early trade on Friday, the euro slipped against the US dollar to trade at $1.2066, while it has gained against the British pound to trade at GBP0.8726.