Vaccine rollout day 13          

On Thursday evening the President of South Africa Cyril Ramaphosa delivered the SONA.  The president laid out 4 pillars that the Government is focused on this coming year

  1. Dealing with the Covid-19 pandemic
  2. Accelerating economic recovery
  3. Creating Jobs and inclusive economic growth
  4. Fighting corruption and strengthening the State

Fighting words that year after year have proven to be nothing than hot air.  The rot is within the ruling party and pillar 4 should have been ranked higher at number two on the list. Ramaphosa, further announced that the country had secured 9 million doses of the J&J vaccine, with 500,000 expected to arrive over the next four weeks so authorities can start inoculating health workers. Another 20 million doses of the vaccine from Pfizer and BioNTech were also on their way. He added that the COVAX facility co-led by the World Health Organization will provide 12 million vaccine doses.

By the close of trade on Thursday 11th February, the South African rand strengthened against the US dollar.

  • Dovish comments by US Federal Reserve Chairman, Jerome Powell.  The federal budget deficit is projected to total $2.3 trillion in the 2021 fiscal year, a drop from last year but well ahead of anything the U.S. had seen prior to the Covid-19 pandemic, the Congressional Budget Office reported Thursday. That total does not include the $1.9 trillion in relief spending that President Joe Biden has proposed, because the ultimate size of the package has not been determined. While smaller than the $3.13 trillion shortfall in fiscal 2020, the red ink this year still will be the second-largest in the nation’s history either in total dollar terms or as a proportion of the $20.9 trillion U.S. economy.
  • The dollar headed for its first losing week in three as new signs of weakness in the U.S. jobs market dented investor expectations about the pace of a pandemic recovery. Bitcoin was on course for its best week since the start of the year after surging to a fresh record near $49,000 following news Thursday that BNY Mellon had become the latest firm to embrace cryptocurrencies. The dollar remained on the back foot on Friday, pinned near two-week lows, after the release of weaker-than-expected weekly U.S. jobless claims data the previous day.
  • President Joe Biden is set to meet with a bipartisan group of senators on Thursday at the White House to seek support for major spending to modernize an aging U.S. infrastructure after his predecessor Donald Trump failed to tackle the matter. The White House said Biden and Vice President Kamala Harris will meet with the lawmakers to discuss what it called “the critical need” to invest in infrastructure, with Transportation Secretary Pete Buttigieg joining the session remotely. Biden has pledged to ask Congress this month for what he has referred to as “historic investments in infrastructure and manufacturing.
  • The United States has sold more than a million barrels of Iranian fuel seized under its sanctions program last year, a Department of Justice official said, as another ship with intercepted Iranian crude oil sails to a U.S. port. The seizures are part of Washington’s tough economic sanctions on Tehran imposed over its nuclear program and the U.S. designation of a number of Iranian groups as terrorists, continuing decades of rancor between the two nations. Iran rejects U.S. accusations of wrongdoing.
  • The number of people filing new applications for unemployment benefits fell slightly for the week ended 5 February, even as the labour market continued to tread cautiously. However, a drop in new COVID-19 cases has raised optimism that momentum could pick up by spring.
  • The yield on benchmark government bonds mostly fell yesterday. The yield on 2026 bond fell to 6.65%. Further, the yield on 2023 bond advanced to 4.66%, while that for the longer-dated 2030 issue fell to 8.45%.

In early trade on Friday, the US dollar is trading marginally higher against the South African rand at R14.6422, while the euro is trading lower at R17.7366.  The British pound has declined against the South African rand to trade at R20.1816.

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

  • The UK has extended COVID-19 vaccine deal with India’s pharma company Wockhart by up to 6 months. The agreement is now expanded to August 2022, and Wockhardt will continue to make vaccines at CP Pharmaceuticals, a subsidiary of the company in Wrexham, North Wales.
  • London has lost its top spot to Amsterdam as the center for stock trading in Europe. It’s the latest blow to the city just a month after the U.K.’s divorce from the European Union was finalized. Trading volumes in January rose fourfold in Amsterdam to more than $11 billion dollars per day, while London’s volume fell to $10.4 billion, according to data from Cboe, one of the world’s largest exchange operators. Financial services is a key driver of the U.K. economy, but so-called equivalence rules about how the industry works its European counterparts were largely left out of the last-minute Brexit deal.
  • The Japanese government decided Friday against lifting the COVID-19 state of emergency covering Tokyo and other regions this week ahead of the March 7 end date, as hospitals continue to be under pressure despite a decline in infections. A total of 1,693 coronavirus cases were reported nationwide on Thursday, down from the single-day peak of 7,882 in early January. However, the number of deaths attributed to COVID-19 hit a record-high of 121 on Wednesday as hospitals struggled to secure enough beds to treat patients with severe symptoms.
  • State and territory governments across Australia are tightening their border restrictions with Victoria after thousands of interstate travelers were potentially exposed to COVID-19 at Melbourne Airport. There are now 13 coronavirus cases linked to Melbourne’s Holiday Inn after five new cases were confirmed, with the state now entering a five-day snap lockdown.

In early trade on Friday, the euro has slipped against the US dollar to trade at $1.2324, while it has gained against the British pound to trade at GBP0.8826.





LOCKDOWN LEVEL 1 Ver4 [DAY 3]  Wave 2


By the close of the new York stock exchange yesterday, the South African rand had strengthened against the US dollar.

  • In the US, the Fed held benchmark interest rates near zero and pledged to use the central bank’s full range of tools until the labour market and the economy recover from the pandemic. The Federal Reserve promised to keep funneling cash into financial markets further into the future to fight the recession, even as policymakers’ outlook for next year improved following initial rollout of a coronavirus vaccine. Repeating a pledge to keep its benchmark overnight interest rate near zero until an economic recovery is complete, the U.S. central bank said it would also now tie its program of monthly government bond purchases to that same goal. Purchases would continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability
  • On the data front, US business activity slowed in the first half of December as renewed restrictions to slow a resurgence in new COVID-19 infections hurt the services sector.
  • U.S. retail sales fell more than expected in November, likely weighed down by raging new COVID-19 infections and decreasing household income, adding to growing signs of a slowdown in the economy’s recovery from the pandemic recession. The second straight monthly decline in retail sales reported by the Commerce Department on Wednesday could nudge Congress to agree on another fiscal stimulus package. Still, economists say more money from the government and the rollout of coronavirus vaccines would probably not stop the economy from sharply slowing down and even contracting in the first quarter of 2021.
  • The United States and Europe should agree to cooperate in opposing any future “hurtful” subsidies used by China to build up its commercial aircraft industry, U.S. Trade Representative Robert Lighthizer announced in an interview.  Lighthizer said he was working to settle a 16-year-old dispute between Washington and Brussels over past government aid to aircraft manufacturers, but expressed frustration that current World Trade Organization rules would not prevent future subsidies by the European Union or China.
  • The yield on benchmark government bonds fell on Tuesday. The yield on 2026 bond declined to 6.81%. Further, the yield on 2023 bond dropped to 4.65%, while that for the longer-dated 2030 issue fell to 8.75%.

In early trade on Thursday, the US dollar is trading lower against the South African rand at R14.7922, while the euro is trading lower at R18.0666.  The British pound has marginally declined against the South African rand to trade at R20.002.

By the close of the bell yesterday, the euro advanced against most of the major currencies.

  • The post-Brexit trade talks may be inching towards an agreement – but it is still possible the two sides will run out of time. The current transition period, during which the UK continues to follow EU rules, began when the UK left the EU, on 31 January, and it ends on New Year’s Eve. If there is no agreement by then, the UK would have no deal with the EU on trade, or on other issues such as security cooperation and fishing. But could there be a legal fix to allow both sides to keep talking if necessary? And what would happen if a deal was agreed only at the very last minute?
  • The Bank of England is expected to refrain from yet more stimulus on Thursday as it waits to see if a possible no-deal Brexit in two weeks’ time deepens the problems already facing Britain’s coronavirus-damaged economy. London and Brussels are still trying to avoid the shock of import tariffs on trade from Jan. 1, so the BoE looks set to leave its bond-buying programme at 895 billion pounds ($1.2 trillion), having ramped it up by 150 billion pounds last month.
  • Germany’s private sector showed resilience in December, as manufacturing picked up steam and services partly recovered ahead of a stricter lockdown to contain a second wave of coronavirus infections.
  • In the UK, inflation slowed by much more-than-expected in November, possibly reflecting Black Friday discounts as clothing and footwear prices fell by the most in a decade.
  • New Zealand’s economy bounced back strongly from recession in the third quarter as massive fiscal and monetary stimulus sparked a recovery in consumer spending. Gross domestic product surged 14% from the second quarter, when it contracted a revised 11%, Statistics New Zealand said Thursday in Wellington. Economists forecast a 12.9% gain. From a year earlier, the economy grew 0.4%, confounding the consensus forecast for a 1.8% decline. New Zealanders have gone on a spending spree since the nation eliminated community transmission of Covid-19 in May and then successfully contained sporadic outbreaks.

In early trade on Thursday, the euro advanced against the US dollar to trade at $1.2222, while it has marginally weakened against the British pound to trade at GBP0.9066.





By the close of trading on Tuesday, the South African rand weakened against the US dollar.

  • The greenback gained ground, after the ISM non-manufacturing PMI rose to a four-month high in December, on account of a partial trade agreement between the US and China.
  • IRAN’S revolutionary guards corps says it has fired “tens of missiles” at US targets.  The strikes raise fears of a wider conflict as well as oil disruption.  President Trump will not deliver a scheduled address following a missile attack on two Iraqi bases that house US troops.
  • Gold and the Japanese yen saw heavy demand as safe haven assets after it was reported early morning that Iran had attacked a couple of US bases in Iraq. Equities tumbled and the US dollar rose as investors sought safe havens in US Treasuries as well. The US 10-year yield slid almost 7 bps to 1.75%, the lowest since December 3. Gold prices surged to the highest since March 2013, rising above the 61.8% Fibonacci retracement level of the September 2011 to December 2015 drop at 1,594.08. USD/JPY fell to the lowest in three months amid yen demand
  • Further, trade deficit narrowed to a three-year low in November, marking its third decline in four months.
  • Durable goods order declined in November, pulled down by steep declines in demand for machinery and transportation equipment, indicating a sustained weakness in the manufacturing sector.
  • The yield on benchmark government bonds ended mixed yesterday. The yield on 2020 bond declined to 6.76% while that for the longer-dated 2026 issue rose to 8.26%.

In early trade on Wednesday, the US dollar is trading 0.1% higher against the South African rand at R14.3261, while the euro is trading 0.1% higher at R15.9809.  The British pound has gained 0.2% against the South African rand to trade at R18.8125.

On Tuesday, the euro declined against most of the major currencies.

  • In the eurozone, consumer price index (CPI) rose in line with market expectations on an annual basis in December, due to rise in energy and unprocessed food prices.
  • Further, retail sales rose more than expected on an annual basis in November.
  • In the UK, news reports indicated that Britain’s emergency preparations for a no-deal Brexit have been halted “with immediate effect” as the UK Prime Minister, Boris Johnson’s deal to leave the European Union is expected to be approved by lawmakers later this week.

In early trade on Wednesday, the euro has marginally advanced against the US dollar to trade at $1.1154, while it has marginally weakened against the British pound to trade at GBP0.8495.