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 4]
TOTAL DAYS 344 – 7 HOURS 30 MINUTES
Vaccine rollout day 32 / J & J VACCINE DAY 20
By the close of trade on Thursday 3rd March 2021, the South African rand weakened against the US dollar.
- Federal Reserve Chairman Jerome Powell said Thursday that he expects some inflationary pressures in the time ahead but they likely won’t be enough to spur the central bank to hike interest rates. “We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” Powell said during a Wall Street Journal conference.
- The number of people filing new claims for unemployment benefits rose for the week ended 26 February, boosted by brutal winter storms in the densely populated South in mid-February, though the labour market outlook is improving amid declining new COVID-19 cases.
- Factory orders increased more than expected in January, pointing to a sustained recovery in manufacturing even as the pace of business spending on equipment is slowing.
- The U.S. will bolster its conventional deterrence against China, including establishing a network of precision-strike missiles along the so-called first island chain and will request a combined $27.4 billion over the next six years for the Indo-Pacific theater, Nikkei has learned. They form the core proposals of the Pacific Deterrence Initiative that the U.S. Indo-Pacific Command has submitted to Congress and which Nikkei has reviewed. “The greatest danger to the future of the United States continues to be an erosion of conventional deterrence,” the document said.
- China announced on Friday a growth target of over 6 percent for its economy for 2021, picking up the decades-long tradition of releasing a numeric goal after skipping it in 2020 due to the COVID-19 pandemic, showcasing top policymakers’ solid confidence on the world’s second-largest economy to sustain a robust recovery despite internal and external risks. The growth target of over 6 percent is largely in line with a widely accepted forecast of over 8 percent for the year.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.39%. Further, the yield on 2023 bond advanced to 5.26% while that for the longer-dated 2030 issue rose to 9.15%.
In early trade on Friday, the US dollar is trading marginally higher against the South African rand at R15.3122, while the euro is trading marginally lower at R18.3136. The British pound has gained against the South African rand to trade at R21.2822.
By the close of business on Thursday, the euro declined against most of the major currencies.
- Tsunami imminent. New Zealand people living in the tsunami danger zone urged to follow evacuation routes to higher ground immediately. This threat level was downgraded and evacuees were permitted to return to their homes. More info on the National Emergency Management Agency website: https://civildefence.govt.nz In Covide-19 news, Auckland will move to alert level 2 and the rest of New Zealand will move to level 1 at 6am on Sunday morning, Prime Minister Jacinda Ardern has announced. Ardern announced the move while speaking to media after a Cabinet meeting to decide on alert level changes.
- the eurozone retail sales fell more than expected on a monthly basis in January. Sluggish pace of vaccination continues to jeopardise the recovery in the eurozone. At the end of February, less than 5% of the population in the eurozone had received at least one dose of one of the vaccines. With Johnson & Johnson most probably able to step into the game from April onwards, supply constraints will ease, but the vaccination process also needs an urgent makeover in many countries if herd immunity is to be reached over the course of this year.
- The Securities and Exchange Commission today announced an award of over $5 million to joint whistleblowers whose tip caused the opening of an investigation that resulted in a successful enforcement action. The whistleblowers provided significant information about misconduct abroad that directly supported certain allegations in the enforcement action. “The whistleblowers’ information alerted the staff to misconduct occurring abroad which could have been difficult to detect without their tip,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.
In early trade on Friday, the euro has slipped against the US dollar to trade at $1.1960, while it has weakened against the British pound to trade at GBP0.8606.
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 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.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 20]
Wave 2 NEW VARIANT
TOTAL DAYS 328 – 07 HOURS 48 MINUTES
Vaccine rollout day 17 / j&j DAY 1
By the close of trade on Monday 16th February 2021, the South African rand weakened against the US dollar. In local news Deputy Chief Justice Raymond Zondo has asked the Constitutional Court to pass verdict on an AWOL Zuma. Ace Magashule is set to appear before the Bloemfontein High Court this Friday, as the ANC goes in to a tail spin over party first country second policies, and the Ramaphosa vs Zuma factions scrum down. The Republic await!
- President Biden has stated “before I took office, I set a big goal of administering 100 million shots in the first 100 days. With the progress we’re making I believe we’ll not only reach that, we’ll break it’ stated Biden.
- In the US, the New York Fed’s Empire State business conditions index rose to its highest level since July in February. U.S. traders came back from their long weekend on Tuesday ready for a busy trading week. They drove stocks to fresh record highs which should have coincided with a weaker U.S. dollar. However stronger than expected manufacturing activity in the New York region boosted risk appetite. Looking ahead sustainability of the dollar and equity market rally hinges on a retail recovery. The end of 2020 was particularly tough for retailers as consumer spending dropped three months in a row.
- Weakness in both the dollar and euro is posing a dilemma for investors about which is the best source of funding for emerging-market carry trades. On balance, the U.S. currency is still the crowd favorite. The dollar has been sliding since the second quarter of 2020 as the Federal Reserve cut interest rates to a record low and spiraling coronavirus infections pummeled the U.S. economy. The euro has begun a swoon of its own in recent weeks, briefly dropping below the key $1.20 level, as delays in coronavirus vaccinations sets back expectations for a European economic recovery.
- Elon Musk’s reign as the world’s richest person was brief. Tesla Inc. shares slid 2.4% on Tuesday, erasing $4.6 billion from its chief executive officer’s fortune and knocking him from the top spot on the Bloomberg Billionaires Index ranking. Jeff Bezos, who’d held the title for more than three years until last month, reclaimed his No. 1 position with a net worth of $191.2 billion, or $955 million more than Musk. Musk’s drop ends for now an almost six-week stint as world’s richest person that saw him front and center in some of the biggest market events so far this year.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 6.89%. Further, the yield on 2023 bond advanced to 4.75%, while that for the longer-dated 2030 issue rose to 8.63%.
In early trade on Wednesday, the US dollar is trading higher against the South African rand at R14.6910, while the euro is trading higher at R17.7679. The British pound has gained against the South African rand to trade at R20.4044.
By the close of trade on Tuesday, the euro declined against most of the major currencies.
- India is poised to clear some new investment proposals from China in the coming weeks as frosty relations between the two neighboring countries thawed amid an easing in border tensions, said three government officials with knowledge of the matter. Last week, India and China began disengagement from the Pangong Tso area, in the Ladakh region of the western Himalayas, following a nearly nine-month-long standoff after the worst clash between the neighboring countries since 1962. At the height of the tensions, India framed various policies targeting China, including blocking the nation from participating in government tenders, compelling any Chinese company investing in India to seek approvals and banning dozens of Chinese apps.
- Meanwhile, investor morale in Germany rose significantly in February, on expectations that consumption will take off in the coming months, thus buoying the outlook for Europe’s largest economy.
- Meanwhile, eurozone’s gross domestic product (GDP) fell less-than-initially estimated in 4Q20 and employment edged higher against the previous three months, despite COVID-19 pandemic lockdowns.
In early trade on Wednesday, the euro has slipped against the US dollar to trade at $1.2092, while it has marginally weakened against the British pound to trade at GBP0.8722.