LOCKDOWN LEVEL 1 Ver3 [ DAY 23]  

TOTAL DAYS 392 – 7 HOURS 35 MINUTES

Vaccine rollout day 79 / J & J VACCINE DAY 67 [SUSPENDED DAY 9]

By the close of trade on Wednesday, the South African rand strengthened against the US dollar. In SA Zuma’s legal woes ramped up a notch as his legal team informed the Kwa Zulu Natal High Court in Pietermaritzburg that they were no longer defending him.  Zuma’s trial date is set to commence in just under a month.

  • President Cyril Ramaphosa set a date for Local government Elections for the 27 October 2021.  Now the Minister of COGTA Minister must Proclaim the date.  Should be a formality but one never knows.
  • Global economic growth depends on advanced economies recovering, but isolationism will likely be a theme in the years ahead The International Monetary Fund (IMF) has recently released its World Economic Outlook report. It has revised higher the gross domestic product (GDP) of America and other advanced economies. A quick look at low-income economies doesn’t reveal similar upgrades, but the news is still good because low-income economies have a hard time growing without growth in advanced economies. A faster and stronger recovery in the developed world is good for the global economy.
  • A missile launched from Syria struck Israel’s Negev desert region early Thursday, setting off air raid sirens near the country’s top-secret nuclear reactor, the Israeli military said. In response, it said it struck the missile launcher and other targets in neighboring Syria. The incident, marking the most serious violence between Israel and Syria in years, pointed to likely Iranian involvement. Iran, which maintains troops and proxies in Syria, has accused Israel of a series of attacks on its nuclear facilities, including a recent fire at its Natanz nuclear facility, and vowed revenge.
  • China has slammed Australia’s “provocative” decision to tear up Victoria’s Belt and Road Initiative agreement with Beijing, warning the move will further damage bilateral relations. Foreign Minister Marise Payne announced on Wednesday night that the infrastructure deal had been cancelled under new foreign veto powers. China’s embassy in Australia responded swiftly, expressing “strong displeasure and resolute opposition” to Senator Payne’s announcement. “This is another unreasonable and provocative move taken by the Australian side against China,” a Chinese embassy spokesperson said in a statement.
  • South African inflation accelerated in March on an annual basis but stayed well below the midpoint of the Reserve Bank’s 3%-6% target band, leaving more scope for policymakers to keep rates lower for longer to shore up SA’s pandemic-hit economy.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.20%. Further, the yield on 2023 bond declined to 4.80% while that for the longer-dated 2030 issue rose to 9.08%.

In early trade on Thursday 22 April 2021, the US dollar is trading marginally higher against the South African rand at R14.2622, while the euro is trading higher at R17.1786.  The British pound has gained against the South African rand to trade at R19.8766.

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

  • Asian stock markets are mostly higher in cautious trading on Thursday, recouping some of the losses of the previous two sessions, following the positive cues overnight from Wall Street. The markets are also benefiting from some bargain hunting after two successive days of losses. However, markets in the region continue to be tense and cautious amid the continuing surge in coronavirus cases in the region and possibility of coronavirus-related lockdowns in some markets, which is casting doubts about an early economic rebound from the pandemic. Asian markets closed sharply lower on Wednesday.
  • In the UK, consumer price index (CPI) picked up in March as global oil prices rose and retailers scaled back their COVID-driven discounts, and it is expected to keep climbing as the economy reopens from lockdown.
  • The Canadian dollar surged by the most since June 2020 against its U.S. counterpart on Wednesday and the Toronto stock market rebounded as investors welcomed a move by the Bank of Canada to dial back emergency support for the economy. The loonie strengthened 0.9% to 1.2495 per U.S. dollar, or 80.03 U.S. cents. Canada’s main stock index ended 0.5% higher at 19,143.25, clawing back some of its decline over the previous two days.  The Bank of Canada has left the policy rate unchanged at 0.25%, but has reduced its weekly asset purchases to C$3bn per week from $4bn to reflect “the progress made in the economic recovery”. This is the second taper, having already cut weekly purchases from the initial C$5bn per week back in October. 2022 rate hike firmly on the table The Bank has also brought forward its forward guidance for when we could see the first interest rate rise. Previously, it suggested we would likely have to wait until 2023, but it’s now signalling the second half of 2022.

In early trade on Thursday, the euro advanced against the US dollar to trade at $1.2055 while it has weakened against the British pound to trade at GBP0.8766.

CURRENCY PATROL   

LOCKDOWN LEVEL 1 Ver3 [ DAY 21]  

TOTAL DAYS 390 – 7 HOURS 35 MINUTES

Vaccine rollout day 77 / J & J VACCINE DAY 65 [SUSPENDED DAY 7]

By the close of trade on Monday 19th April 2021, the South African rand strengthened against the US dollar.

  • South Africa recorded large current account and trade surpluses in the last two quarters of FY20 on higher demand for commodities as global trade conditions eased with the falling COVID-19 infections and a subsequent loosening of restrictions on economic activity.
  • The selling pressure on the greenback, evident last week, despite a series of stronger than expected economic reports, carries over into the new week’s activity. The euro punched through the $1.20 cap that had blocked it last week, and the dollar is testing the JPY108 level, which it has not traded below since early March. Most emerging market currencies are also firmer, and the JP Morgan Emerging Market Currency Index is moving higher for its fifth consecutive session after last week’s 1% gain. The US 10-year benchmark yield is a couple basis points lower at 1.55%.
  • Philippine President Rodrigo Duterte said challenging China in the South China Sea will only lead to violence, and that he will only do so if Beijing drills for oil in the disputed waters. “If we go there to assert our jurisdiction, it will be bloody,” Duterte said at a televised briefing late Monday, his first remarks after hundreds of Chinese vessels were spotted at a disputed reef in March. Duterte said it’s not the time to confront China and that he’s “not so much interested” in the marine resources in the disputed sea. “I will give them five Coast Guard ships, and they can chase it.  They can play with each other, and see who’s faster,” Duterte said. The Philippine leader however said he will send Navy ships in the contested waters if China begins to drill for oil. “If they get the oil, that would be time that we should act on it,” he said.
  • Chinese President Xi Jinping called for greater global economic integration and warned against a new “Cold War” and ideological confrontation in “whatever forms” at the opening ceremony of the 2021 Boao Forum for Asia (BFA) on Tuesday.
  • A new understanding is emerging at talks aimed at salvaging Iran’s nuclear deal with global powers, Tehran’s chief negotiator said on Saturday according to Iranian state media, as China’s delegate also reported progress. Abbas Araqchi said after a meeting of remaining parties to the 2015 deal that the Iranian delegation had submitted proposed texts on nuclear issues and the lifting of sanctions, and that work on a common text, “at least in areas where there are common views”, could begin.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.18%. Further, the yield on 2023 bond advanced to 4.91% while that for the longer-dated 2030 issue rose to 9.06%.

In early trade on Tuesday, the US dollar is trading lower against the South African rand at R14.2130, while the euro is trading higher at R17.1322. The British pound has marginally gained against the South African rand to trade at R19.9012.

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

  • The German Bundesbank monthly report showed that economic output decreased in 1Q21, as stricter and longer-lasting restrictions increased the losses in many service sectors.
  • When asked where UK unemployment will be at the end of this year, most economists would, probably say ‘higher than it is now’. But predicting how high remains a tricky question to answer and highlights how several aspects of the crisis in the jobs market differ from previous recessions. Let’s start with the noticeable difference – the furlough scheme. The extension of wage support through the winter lockdown and now until the end of September has helped the jobs market turn a tentative corner over recent months. While payroll-based employment is still down some 2.4% on pre-pandemic levels,  there has been a gradual recovery outside of the consumer services arena no doubt as firms have become more adept at operating through lockdowns. The admin/support sector, for instance, has now all-but-erased the 6.3% fall in employment seen amid the pandemic.
  • Russian jets have struck a terrorist training camp northeast of Palmyra, destroying 24 vehicles and half a ton of explosive materials while killing up to 200 militants, the Russian military has announced. After confirming intelligence about a camouflaged terrorist camp in the Syrian desert, the Russian Aerospace Forces carried out the airstrike, and destroyed two terrorist structures, “up to 200 militants, 24 pickups with heavy machine guns, as well as about 500 kg of ammunition and components for creating improvised explosive devices were destroyed according to Rear Admiral Aleksandr Karpov.

In early trade on Tuesday, the euro has advanced against the US dollar to trade at $1.2066, while it has gained against the British pound to trade at GBP0.8632.

CURRENCY PATROL   

LOCKDOWN LEVEL 1 Ver3 [ DAY 15]  

TOTAL DAYS 385 – 7 HOURS 35 MINUTES 

Vaccine rollout day 71 / J & J VACCINE DAY 59 [SUSPENDED DAY 1]

By the close of trade on Wednesday 14th April 2021, the South African rand strengthened against the US dollar.  Worrying news as the Zuma saga escalates.  In his latest snub Zuma has defied a ruling by the Chief Justice to submit papers before the Apex court.  In another major development the President announced a shuffle of the Defense force heads as the “Old Guard” was removed and new names mentioned to head up the Army, Airforce, Joint Chiefs and Intelligence.

  • Retail sales in South Africa unexpectedly rose on an annual basis in February, as decrease in the second wave of Covid-19 infections and the end of alcohol bans might have seen more consumers going out to spend.
  • In the US, Fed’s beige book showed that economic activity between late February and early April. The U.S. economic recovery accelerated to a moderate pace from late February to early April as consumers, buoyed by increased COVID-19 vaccinations and strong fiscal support, opened their wallets to spend more on travel and other items, the Federal Reserve said on Wednesday. The labor market, which was decimated by the coronavirus pandemic, also improved as more people returned to work, with the pace of hiring picking up the most in the manufacturing, construction, and leisure and hospitality sectors. “Reports on tourism were more upbeat, bolstered by a pickup in demand for leisure activities and travel
  • The Arab coalition destroyed three explosive-laden drones launched by Houthis toward Saudi Arabia on Wednesday, Al-Ekhbariya reported. The drones targeting Jazan is the latest in a long line of attacks against the Kingdom by the Iran-back Houthi militia. The coalition said the attack is a continuation of the Houthi’s systematic and intentional hostile attempts to target civilians. The Houthis, who took over the capital of Yemen, Sanaa, in 2014, have been condemned for their actions against the Kingdom.
  • India reported more than 200,000 new infections on Thursday — its highest one-day surge since the pandemic broke out — as a deadlier new wave grips the world’s second worst-hit country. With 200,739 new cases, the outbreak in the South Asian nation has gone past 14 million. Casualties rose to 173,123 while more than 114 million vaccine doses have been administered, according to latest data from India’s health ministry. After seeing new infections ebb at the beginning of this year, Covid cases began spiking up since March.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.35%. Further, the yield on 2023 bond advanced to 5.02% while that for the longer-dated 2030 issue fell to 9.21%.

In early morning trade on Thursday, the US dollar is trading higher against the South African rand at R14.4122, while the euro is trading higher at R17.2572.  The British pound has gained against the South African rand to trade at R19.8562.

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

  • The European Central Bank (ECB) Vice President Luis de Guindos stated that ECB will act on any detrimental rise in borrowing costs and considers removing stimulus too early a bigger risk than acting too late. One year into the pandemic, Europe finds itself at another turning point. New waves of infection are hitting the continent, requiring new lockdowns. But, unlike last year, safe and effective vaccines are now available. While the pace of vaccination is still slow, an end to the pandemic is in sight. Reflecting the periodic infection waves and the pace of vaccinations, the economic recovery in Europe is still halting and uneven. While industrial production has returned to pre-pandemic levels, the service sector is still contracting. While the pace of vaccination is still slow, an end to the pandemic is in sight.
  • Britain has agreed with the European Union that it will respond to the bloc’s legal action over how it has introduced new trading rules for Northern Ireland by mid-May, a spokeswoman for the government said on Wednesday. The EU launched legal action against Britain in March for unilaterally changing trading arrangements for Northern Ireland that Brussels says are in breach of the Brexit divorce deal agreed with London last year.
  • Australia will likely find Covid-19 has a lingering effect on the economy and the sheer scale of stimulus means it will probably be a couple of years before it’s clear how much has changed, former Reserve Bank board member Heather Ridout said. “People are operating differently, companies are having to operate differently and it’s going to take a long time before supply chains get back to what they were before,” Ridout said in an interview with Bloomberg News Wednesday. “There will be a new normal and I think worrying about pandemics and all of this will become part of the new normal.”
  • Bank of Japan Governor Haruhiko Kuroda on Thursday stuck to the view that the country’s economy is on a recovering trend despite the continuing impact of the coronavirus pandemic. Speaking during a videoconference with the central bank’s branch managers, Kuroda also pointed to difficulties companies face raising funds even under the BOJ’s accommodative monetary policy, saying the bank will not hesitate to take additional easing steps if needed.

In early trade on Thursday, the euro has slipped against the US dollar to trade at $1.1992, while it has marginally weakened against the British pound to trade at GBP0.8722.

LOCKDOWN LEVEL 1 Ver3 [ DAY 15]  

TOTAL DAYS 384 – 7 HOURS 35 MINUTES

Vaccine rollout day 71 / J & J VACCINE DAY 59 [SUSPENDED DAY 1]

By the close of trade on Tuesday 13th April 2021, the South African rand strengthened against the US dollar.  In South Africa confusion abounds as the Health Minister announced that the J&J vaccine had been placed on hold.  South Africa has up to now only administered 292 263 vaccines with no public announcement on vaccine registrations or program forthcoming.  This announcement followed on the heels of the US suspending J&J vaccines after 6 people had died after taking the vaccine.

  • In SA data released in mining, showed that production was better than expected in February, posting a first annual gain in a year as double-digit increases in the output of iron and manganese ore, as well as other non-metallic minerals, boosted the mining sector.
  • In the US, the consumer price index (CPI) rose by the most in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation. A gauge of global equity markets rose to record highs on Tuesday, led by surging technology-related stocks, as Treasury bond yields eased after U.S. consumer price data for March showed the pace of inflation was not rising wildly. The consumer price index rose 0.6%, the biggest increase since August 2012, as rising vaccinations and fiscal stimulus unleashed pent-up demand. But the data is unlikely to change Federal Reserve Chair Jerome Powell’s view that higher inflation in coming months will be transitory.
  • The pace of consumer inflation is likely to have returned to pre-pandemic levels in March, and it is expected to heat up even more in the next couple of months. Rising inflation is one of the biggest fears in the market, and if it gets too hot, it could corrode asset values, limit buying power and eat away at corporate margins.
  • Airport traffic is rebounding off of pandemic troughs in most countries, though Fitch Ratings’ latest quarterly Global Airport Tracker report says the proverbial runway to normal will not be in sight for years. Now reflecting a one- to two-year delay since its last report, Fitch now forecasts recovery estimates ranging anywhere from 4Q’23 to 2025 before airport traffic returns to 2019 levels. The obvious variable is new COVID-19 variants and surges in the number of cases, which caused additional or prolonged lockdown measures and could linger as vaccine roll outs remain slow and uneven on a global basis.
  • Billionaires like Bill Gates have long said that they, theoretically, would be in favor of paying much more money in personal taxes. And yet Gates and some of the wealthiest people in the world are staying silent on a series of active proposals that would do just that, sidestepping a legislative package in their home state of Washington that targets them specifically. Washington is home to four of the richest people on the planet: Gates, Amazon founder Jeff Bezos, Bezos’s ex-wife novelist MacKenzie Scott, and longtime Microsoft CEO Steve Ballmer.
  • China is taking more direct steps to mend relations with U.S. investors, ramping up its communication with businesses in an environment of heightened economic tensions between the two nations. Officials from the National Development and Reform Commission, the government’s top economic planning body, met Tuesday with representatives of companies like Tesla Inc., Qualcomm Inc. and Dell Technologies Inc. the first of possibly more similar meetings planned with U.S. firms.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.46%. Further, the yield on 2023 bond declined to 5.12% while that for the longer-dated 2030 issue rose to 9.34%.

In early trade on Wednesday, the US dollar is trading lower against the South African rand at R14.4954, while the euro is trading lower at R17.3732.  The British pound has marginally declined against the South African rand to trade at R19.9572.

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

  • Investor sentiment in Germany fell unexpectedly in April, citing rising fears that private consumption could be depressed as Europe’s largest economy gets closer to extending lockdown measures.
  • In the UK, Gross Domestic Product (GDP) rose less than expected on a monthly basis in February, showing a partial recovery in post-Brexit trade with the European Union.
  • Japan’s core machinery orders unexpectedly fell the most in about a year in February, government data showed, dashing hopes for a pick-up in capital expenditure needed for a private sector-led recovery from the coronavirus-induced slump. Policymakers are counting on companies to spend their huge cash piles on investment in plant and equipment and wage hikes to help pull the world’s third-largest economy out of deflation and stagnation.

In early trade on Wednesday, the euro has advanced against the US dollar to trade at $1.1972, while it has marginally gained against the British pound to trade at GBP0.8722.

LOCKDOWN LEVEL 1 Ver3 [ DAY 8]  

TOTAL DAYS 377 – 7 HOURS 25 MINUTES

Vaccine rollout day 65 / J & J VACCINE DAY 53

By the close of trade on Wednesday 7th April 2021, the South African rand weakened against the US dollar.  Today president Ramaphosa heads to Mozambique for a Troika summit on Security and top of the agenda the risk that Al Shabab insurgency has to the Region.

  • Meanwhile, the IMF forecasted growth of 3.1% for SA, up from an estimate of 2.8% made in January. It forecasts global growth of 6.0% in 2021, an increase of 0.5% from its January projection, reflecting a rapidly brightening outlook for the US economy.
  • In the US, the Fed minutes from its March meeting showed that easy policy will stay in place until it produces stronger employment and inflation, and won’t be adjusted based merely on forecasts.
  • Chicago Fed President, Charles Evans, stated that he is optimistic and confident in his forecast for stronger growth this year, but said that the Fed will need to see actual progress toward its goals, not just improved forecasts, before reducing its massive bond buying program.
  • On the data front, trade deficit widened in February. U.S. consumer borrowing surged in February by the most since late 2017 as a broader re-opening of the economy from pandemic restrictions helped spark an increase in credit-card balances. Total credit jumped $27.6 billion from the prior month, the largest gain since November 2017, after a revised $94 million January gain, Federal Reserve figures showed Wednesday. On an annualized basis, borrowing rose 7.9% in February. The gain in February credit exceeded all estimates in a Bloomberg survey of economists. Revolving credit climbed $8.1 billion, the most since December 2019 and only the second advance in a year.
  • The Kremlin said on Wednesday that Russia would keep military forces near its border with Ukraine for as long as it saw fit and a high-ranking Moscow security official added it could take “measures” if necessary. Western nations have called for restraint after Ukraine raised the alarm over a buildup of Russian forces near its border and violence rose along the line between Kyiv’s troops and separatists in Ukraine’s east. Russia’s Security Council secretary, Nikolai Patrushev, said Russia had no plans to intervene in the conflict.
  • The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.37%. Further, the yield on 2023 bond declined to 5.17% while that for the longer-dated 2030 issue fell to 9.31%.

In early trade on Thursday 8th April 2021, the US dollar is trading lower against the South African rand at R14.5572, while the euro is trading lower at R17.2866.  The British pound has marginally gained against the South African rand to trade at R20.0272.

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

  • The eurozone business activity bounced back to growth in March, underpinned by a record expansion in manufacturing.
  • Growth in Germany’s private sector accelerated in March to its highest level in more than three years as the services sector fared surprisingly well despite extended coronavirus curbs and a third wave of infections.

In early trade on Thursday 8th April 2021, the euro marginally advanced against the US dollar to trade at $1.1926, while it has weakened against the British pound to trade at GBP0.8632.