LOCKDOWN LEVEL 1 Ver3 [ DAY 22]  

TOTAL DAYS 391 – 7 HOURS 35 MINUTES

Vaccine rollout day 78 / J & J VACCINE DAY 66 [SUSPENDED DAY 8]

By the close of trade on Tuesday 20th April 2021, the South African rand weakened against the US dollar.    Paying extra for additional legroom is one of the more infuriating aspects of air travel. Even more infuriating? Being asked to pay almost $800 million for it. Australian comedian Dave O’Neil, who later described himself as a “big man,” was flying for the first time since the pandemic hit Australia in March last year. But after deciding to book a seat on Qantas with extra legroom for his flight to Perth, he was amused to see the price pop up: $987,999,999 in Australian dollars, which works out to a little more than USD$770 million. Like any comedian presented with readymade joke material, he tweeted about it.

  • Toronto health authorities will order workplaces across Canada’s biggest city to close if they have more than five confirmed cases of Covid-19. The decision Tuesday overrides less stringent provincial orders, and follows a similar move by Peel Region, a western suburb. It comes as the city struggles to contain a surge in variant cases that threatens to collapse the local health-care system. Workplaces, or portions of workplaces, will be required to close for at least 10 calendar days if five or more confirmed cases of Covid-19 have been identified in a two-week period.
  • Companies are freaking out about soaring prices (as we will shows shortly), lumber has risen for 17 consecutive days, and crippled supply chains have pushed commodity and input costs (for those items that can still be found) to levels not seen in years, but all of this is news to Jerome Powell. In an April 8 letter from the Fed Chair to Senator Rick Scott, Powell said the overheating U.S. economy is going to temporarily see “a little higher” inflation this year as supply constraints push up prices in some sectors, but fear not – the Federal Reserve is committed to keeping any overshoot within limits.
  • Diplomats negotiating the revival of the Iran nuclear deal in Vienna today gave the strongest indications to date that Washington and Tehran are ready to set aside maximalist demands and work toward the eventual lifting of US sanctions that have crippled Iran’s oil exports. The joint commission that oversees the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), has “decided to create a third expert group to start looking into the possible sequencing of respective measures,” said the EU External Action Service’s Enrique Mora, who is coordinating the meeting.
  • A suicide bombing targeted Afghan security forces Tuesday in an attack that comes shortly after the U.S. announced its plan to withdraw from Afghanistan. Security officials told Reuters that the bombing targeted a convoy in Kabul, but no casualties were immediately reported. Afghan Interior Ministry spokesman Tariq Arian confirmed on Twitter that an explosion occurred in the area but provided no further details. The bombing is the first major attack to hit Afghanistan since President Biden last week laid out his plan to withdraw U.S. troops from the country.
  • The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.19%. Further, the yield on 2023 bond declined to 4.89% while that for the longer-dated 2030 issue rose to 9.07%.

In early trade on Wednesday, the US dollar is trading marginally higher against the South African rand at R14.3122, while the euro is trading marginally higher at R17.2267.   The British pound has marginally declined against the South African rand to trade at R19.9426.

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

  • A European Central Bank lending survey showed that the eurozone banks expect to tighten access to credit further in the second quarter. It added that loan demand was also waning as firms were postponing investments while many were living off either liquidity buffers or direct government liquidity support.
  • The latest reading of Germany’s manufacturing PMI at 66.6 in March exceeded the previous all-time high in the 25-year history of the series by more than three points, merchandise exports have come close to pre-pandemic levels in February, and manufacturing orders have been recovering with almost no interruption since May 2020 and are now at their highest levels since December 2018. At the same time, service-sector PMI, which had enjoyed a brief phase of (above-50) expansionary readings in Q3 2020 before dropping back into contraction territory thereafter, only managed to edge modestly above 50 in March.
  • Western EU banks’ 2Q21 results will start to reveal the true extent of asset quality deterioration due to the pandemic, Fitch Ratings says in a new report. So far this has been masked by loan moratoria but a clearer picture should start to emerge now that most have expired. Fitch nevertheless expects loan impairment charges from loan moratoria to fall within the baseline estimates communicated in our 2021 outlook for western European banks. Outstanding moratoria in major western EU economies comprised just 3.5% of loans to households and non-financial corporates at end-2020, down from 6% at end-3Q20.

In early trade on Wednesday, the euro marginally slipped against the US dollar to trade at $1.2062, while it has marginally gained against the British pound to trade at GBP0.8678.

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.

LOCKDOWN LEVEL 1 Ver3 [ DAY 20]  

TOTAL DAYS 389 – 7 HOURS 35 MINUTES

Vaccine rollout day 76 / J & J VACCINE DAY 64 [SUSPENDED DAY 6]

By the close of trade on Friday 16th April 2021, the South African rand weakened against the US dollar.

  • Just as some patients recovering from Covid-19 suffer long-lasting symptoms, it’s becoming clear that the same will be true for the global economy once this year’s V-shaped rebound fades. While $26 trillion worth of crisis support and the arrival of vaccines have fueled a faster recovery than many anticipated, the legacies of stunted education, the destruction of jobs, war-era levels of debt and widening inequalities between races, genders, generations and geographies will leave lasting scars, most of them in the poorest nations.
  • In the US, house building surged to nearly a 15-year high on monthly basis in March.
  • Michigan consumer sentiment index rose less than expected in April.
  • At least five rockets hit the Iraqi military airbase at Balad north of Baghdad, wounding two Iraqi soldiers, the Iraqi military said in a statement. Security officials had said earlier that the Katyusha rockets had fallen on the area of the base that houses US contractors, and that no casualties had been reported. No group immediately claimed the attack on Sunday, but armed groups that some Iraqi officials say are backed by Iran have claimed similar incidents in the past. US officials have blamed Iranian-backed militias for regular rocket attacks aimed at US facilities in Iraq, including the US Embassy in Baghdad.
  • 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. Iran has breached many of the deal’s restrictions on its nuclear activities in response to the U.S. withdrawal from the deal under the Trump administration.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.16%. Further, the yield on 2023 bond declined to 4.88% while that for the longer-dated 2030 issue fell to 9.04%.

In early trade on Monday 19th April 2021, the US dollar is trading lower against the South African rand at R14.2836, while the euro is trading lower at R17.0826.  The British pound has declined against the South African rand to trade at R19.7677.

By the close of trade on Friday 16th April 2021, the euro advanced against most of the major currencies.

  • In the Eurozone, consumer price index (CPI) rose in line with expectations on monthly basis in March.
  • The U.K. economy is building momentum, with real-time indicators suggesting consumers have started to splurge some of the cash they’ve saved now that the government has loosened lockdown rules. Restaurant bookings and job postings surged to the highest since the start of the coronavirus pandemic, while road traffic and the number of people traveling to workplaces grew in recent weeks, data from Bloomberg Economics and government statistics show. Shops and bars were allowed to reopen on April 12, and most restrictions are set to lapse by June 21. With more almost two thirds of adults in the U.K. immunized against the Covid-19 virus.  Over 400 financial firms in Britain have shifted activities, staff and a combined trillion pounds ($1.4 trillion) in assets to hubs in the European Union due to Brexit, with more pain to come, a study from New Financial think tank said on Friday.
  • Asking prices for homes up for sale across Britain have reached the highest level on record in the past month, fresh figures from Rightmove suggest. The average asking price jumped over £6,700 to a new ‘all-time high’ of £327,797 in a single month, with buyers flocking to snap up homes with ample outdoor space and options for home working. On a monthly basis, average asking prices climbed over 2 per cent amid ‘frenzied’ buyer activity, and on an annual basis asking prices have risen by 5.1 per cent.
  • Quarantine-free travel between Australia and New Zealand has restarted, reconnecting families, businesses, and tourists more than a year after COVID-19 restrictions created an invisible barrier across the Tasman. From today, travelers from Australia will be permitted to enter New Zealand without spending two weeks in mandatory isolation upon arrival. The system is conditional on the number of cases in each jurisdiction. However, it is poised to rejoin families after an extended period apart, and slowly mend the $2.7 billion hole left in New Zealand’s economy when Australian tourists were first barred from
  • Osaka set to ask gov’t to reimpose COVID-19 emergency according to news from the Governor.  Japanese exports posted a double-digit increase for the first time in more than three years in March as the recovery picked up in key markets abroad. The value of overseas shipments gained 16.1% from a year ago, led by exports of cars, plastics and non-ferrous metals, the finance ministry reported Monday. Economists had forecast an 11.4% increase. The figures were boosted by comparison with data from 2020 when the coronavirus was slamming global trade.
  • Having rebounded from its worst month since 2019, China’s yuan is facing a new wave of selling pressure as hundreds of companies prepare to exchange the currency to pay dividends. Chinese firms listed in Hong Kong are expected to pay nearly $68 billion in dividends this year, which would be nearly 17% higher than 2020’s amount. That means they’ll step up swapping the yuan for the city’s dollars in coming months. This comes after the yuan rebounded about 0.5% from March’s 1.3% drop, when risk assets were sold off due to a spike in Treasury yields.  Deutsche Bank AG is replacing its global pricing engine for emerging-market currencies in London with one in Singapore, drawn by surging trading in Asia and the increasing importance of the Chinese yuan. Locating new and more powerful computer hardware in the city-state will help the bank shave vital fractions of seconds from the time it takes to execute orders in the region.

In early trade on Monday 19th April 2021, the euro has slipped against the US dollar to trade at $1.1962, while it has weakened against the British pound to trade at GBP0.8672.

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 13]  

TOTAL DAYS 382 – 7 HOURS 35 MINUTES

Vaccine rollout day 70 / J & J VACCINE DAY 58

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

  • Locally there are just days of reckoning for Zuma and Judge Hlophe. Will the ConCourt and JSC imprison and push to impeach respectively?
  • Hideki Matsuyama’s historic win at Augusta National is going to make him very rich. The 29-year-old became the first Japanese man to win a golf major by finished 10-under to win the Masters by one shot from American debutant Will Zalatoris. Masters win ‘worth a billion dollars’ Matsuyama’s victory will see him rival Naomi Osaka as the most famous athlete in Japan and could make him a billionaire, according to two-time US Open winner Andy North.
  • In the US, producer price index (PPI) increased more than expected in March, resulting in the largest annual gain in 9-1/2 years and likely marking the start of higher inflation as the economy reopens amid an improved public health environment and massive government aid. The U.S. economy is at an “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but some risks remain, particularly any resurgence in the coronavirus pandemic, Federal Reserve Chair Jerome Powell said.
  • Wholesale inventories increased slightly more than initially estimated in February amid a decline in sales.
  • The European Union’s top diplomat said on Sunday Russia and China were hampering a united international response to Myanmar’s military coup and that the EU could offer more economic incentives if democracy returns to the country. “It comes as no surprise that Russia and China are blocking the attempts of the U.N. Security Council, for example to impose an arms embargo,” EU foreign policy chief Josep Borrell said in a blog post.
  • The yield on benchmark government bonds rose on Friday. The yield on 2026 bond rose to 7.42%. Further, the yield on 2023 bond advanced to 5.15% while that for the longer-dated 2030 issue rose to 9.28%.

In early trade on Monday 12th April 2021, the US dollar is trading  higher against the South African rand at R14.6266, while the euro is trading higher at R17.3935.  The British pound has marginally declined against the South African rand to trade at R20.0172.

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

  • German trade surplus narrowed in February, as exports to the UK and other EU states fell.
  • In a rare admission of the weakness of Chinese coronavirus vaccines, the country’s top disease control official says their effectiveness is low and the government is considering mixing them to get a boost. Chinese vaccines “don’t have very high protection rates,” said the director of the China Centers for Disease Control, Gao Fu, at a conference Saturday in the southwestern city of Chengdu. Beijing has distributed hundreds of millions of doses abroad while trying to promote doubt about the effectiveness of the Pfizer-BioNTech vaccine made using the previously experimental messenger RNA, or mRNA, process.
  • The Federal Government has abandoned its target of offering every eligible Australian their first COVID-19 vaccine dose by October 31. In a Sunday night statement, Prime Minister Scott Morrison said “it is not possible” to provide new timelines given “uncertainties” in the rollout. The confirmation comes days after Australian health authorities recommended those under 50 receive alternatives to the AstraZeneca vaccine, which was a cornerstone of the nation’s rollout scheme.
  • Japanese wholesale prices marked their first annual increase in more than a year in March, data showed on Monday, a sign that rising commodities costs are pinching corporate margins, adding inflationary pressure to the world’s third-largest economy.  Japanese bank lending rose 6.3% in March from a year earlier, data showed on Monday, as restaurants and hotels sought more loans to weather the hit from the COVID-19 pandemic. Deposits held by banks were also up 9.9% in March as households continued to save rather than spend on uncertainty over the pandemic’s fallout, the Bank of Japan data showed. Outstanding loans held by the country’s four main categories of banks, including “shinkin” or credit unions, hit a fresh record at 579.995 trillion yen ($5.29 trillion), according to the data. In February, total loans increased 6.2%.

In early trade on Monday, the euro has slipped against the US dollar to trade at $1.1927, while it has gained against the British pound to trade at GBP0.8572.