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.
LOCKDOWN LEVEL 1 Ver3 [ DAY 9]
TOTAL DAYS 378 – 7 HOURS 25 MINUTES
Vaccine rollout day 66 / J & J VACCINE DAY 54
By the close of trade on Thursday 8th April 2021, the South African rand strengthened against the US dollar.
- In the South Africa, on the data front, manufacturing output contracted more than expected in February, led by declines in the output of petroleum, chemicals, rubber, plastics, furniture and metal products.
- Federal Reserve Chair Jerome Powell on Thursday signaled the central bank is nowhere near to reducing its support for the U.S. economy, noting that an expected rise in prices this year is likely to be temporary, and warning that an uptick in COVID-19 cases could slow the recovery. “Cases are moving back up here, so I would just urge that people do get vaccinated and continue socially distancing,” said Powell, who has been vaccinated himself, speaking at an economic forum during the virtual International Monetary Fund and World Bank meetings.
- On March 31, 2021, President Biden released the American Jobs Plan (AJP). This plan proposed $2.3 trillion in new federal spending on various forms of public infrastructure, research and development, workforce training, affordable housing, and caregiving. Later reporting confirmed that the AJP would include an additional $400 billion in clean energy tax credits not specified in the administration’s original announcement. In total, the AJP proposes $2.7 trillion in new federal spending over the next 8 years, 2022 to 2029.
- China’s producer prices climbed the most since July 2018 as commodity costs surged and the economy’s recovery strengthened. Consumer prices gained for the first time in three months. The producer price index rose 4.4% in March from a year earlier after gaining 1.7% in February, the National Bureau of Statistics said Friday. The median forecast in a Bloomberg survey of economists was 3.6% The consumer price index rose 0.4% from a year earlier Key Insights After months of deflation, producer prices have started to pick up sharply this year as the cost of oil, copper and agricultural goods rallied.
- On the data front, the number of people filing new claims for unemployment benefits unexpectedly rose for the week ended 2 April, but the increase likely understated the rapidly improving labour market conditions as more parts of the economy reopen and fiscal stimulus kicks in.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.36%. Further, the yield on 2023 bond declined to 5.14% while that for the longer-dated 2030 issue fell to 9.21%.
In early trade on Friday, the US dollar is trading higher against the South African rand at R14.5474, while the euro is trading higher at R17.3152. The British pound has gained against the South African rand to trade at R19.9762.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- The eurozone producer price index (PPI) increased at an accelerated pace on an annual basis in February due to surges for energy and intermediate goods.
In early trade on Friday, the euro has slipped against the US dollar to trade at $1.1964, while it has weakened against the British pound to trade at GBP0.8672.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 31]
Wave 2 NEW VARIANT
TOTAL DAYS 338 – 7 HOURS 45 MINUTES
Vaccine rollout day 25 / J & J VACCINE DAY 12
By the close of trade on Thursday 25th February 2021, the South African rand weakened against the US dollar.
- This was despite South Africa’s 2021 budget speech being largely welcomed by analysts.
- The United States launched airstrikes in Syria on Thursday, targeting facilities used by Iranian-backed militia groups. The Pentagon said the strikes were in retaliation for a rocket attack in Iraq earlier this month that killed one civilian contractor and wounded a U.S. service member and other coalition troops. The airstrike was the first military action undertaken by the Biden administration, which in its first weeks has emphasized its intent to put more focus on the challenges posed by China, even as Mideast threats persist.
- In the US, the economy grew slightly faster than first estimated in 4Q20.
- Fewer Americans filed new claims for unemployment benefits last week, amid falling COVID-19 infections, but the near-term outlook for the labour market is unclear after winter storms wreaked havoc in the Southern region recently. The number of individuals filing first-time claims for state unemployment benefits fell sharply last week, with a total of 730,000 new claims for the week ended Feb. 20, the Department of Labor reported. The unemployment rate has also been falling, dropping to 6.3% in January. Signs of improvement in the labor market may create the appearance that the economy is gaining strength amid increasing vaccinations for Covid-19.
- Pending home sales fell in January, amid a continued shortage of houses available for sale.
- Federal Reserve policymakers are shrugging off the surge in longer-term U.S. government bond yields as a sign of growing optimism about the economy, which could pick up steam as more people are vaccinated against the coronavirus. And none of the officials so far are signaling an interest in lightening up on the U.S. central bank’s accommodative monetary policy stance, even as the yield on the benchmark 10-year Treasury note on Thursday topped the 1.50% level for the first time in a year, sending stocks sharply lower.
- The January durable goods report shows that the manufacturing sector has well and truly shaken off the disruption from the pandemic. Headline orders rose 3.5% month-on-month, well ahead of the 1.1% consensus and its ninth consecutive monthly rise. Admittedly the highly volatile non-defense aircraft component (Boeing airliners) boosted the figure by jumping 390%, but strip out transportation and orders still rose 1.4% versus the 0.7% consensus forecast.
- The yield on benchmark government bonds rose yesterday. The yield on 2026 bond rose to 7.31%. Further, the yield on 2023 bond advanced to 5.32%, while that for the longer-dated 2030 issue rose to 8.99%.
In early trade on Friday, the US dollar is trading higher against the South African rand at R15.0410, while the euro is trading lower at R18.2777. The British pound has declined against the South African rand to trade at R21.0265.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- The eurozone economic sentiment rose more-than-expected in February, buoyed by more optimism in industries, services as well as among consumers.
- Reserve Bank Governor Adrian Orr has used his first opportunity to publicly comment on the central bank’s remit tweak to stress this won’t change the way it sets monetary policy. Speaking to the Canterbury Employers’ Chamber of Commerce on Friday, Orr said: “Our Monetary Policy Committee remit targets remain unchanged. “We remain only focused on maintaining low and stable consumer price inflation and contributing to maximum sustainable employment, as recently outlined in our Monetary Policy Statement.” Orr’s comments saw the New Zealand dollar fall from US73.8 cents to US73.2 cents.
In early trade on Friday, the euro has slipped against the US dollar to trade at $1.2163, while it has gained against the British pound to trade at GBP0.8699.
LOCKDOWN ADJUSTED LEVEL 3 Ver2 [ DAY 1]
Wave 2 NEW VARIANT
TOTAL DAYS 313
Vaccine rollout day 1 – 07 HOURS 45 MINUTES
By the close of trade on Monday, the South African rand strengthened against the US dollar. This came as Yield-seeking investors made tentative bets on the volatile currency.
- Most of the time, investors are focused on two V’s: value and volatility. However, two other V’s will continue to dominate the month ahead for the investment climate: virus and vaccine. At the end of January, it seemed like many high-income countries had begun seeing leveling-off after the holiday-inspired surge. Economic-cramping restrictions will remain in place for the next several weeks, and many consider deepening and/or broadening restrictions. The IMF boosted this year’s outlook and sees world growth at 5.5%, up from 5.2% in October. If accurate, it would be the strongest growth since 2010’s recovery.
- More than four-fifths of the world’s central banks (86%) are engaged in “some form of work” on a central bank digital currency (CBDC), up from “about one third” in 2019, according to a Bank for International Settlements (BIS) survey. Some 60% are actively conducting experiments or proofs-of-concept and 14% are moving into development and pilot phases, the survey found. “Central banks collectively representing a fifth of the world’s population are likely to issue a general purpose CBDC in the next three years.
- On Monday, Secretary Janet Yellen spoke with Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland. During the call, Secretary Yellen affirmed the importance of close collaboration between the United States and Canada on economic policy and national security. Secretary Yellen conveyed her priorities for bolstering recovery efforts and mitigating the impact of the COVID-19 pandemic, fighting inequality and creating jobs, and forcefully addressing the threat of climate change. The Secretary also discussed the importance of the U.S.-Canada trade relationship to both economies.
- U.S. President Joe Biden on Monday threatened to reimpose sanctions on Myanmar following a coup by the country’s military leaders and called for a concerted international response to press them to relinquish power. Biden condemned the military’s takeover from the civilian-led government on Monday and its detention of elected leader and Nobel laureate Aung San Suu Kyi as “a direct assault on the country’s transition to democracy and the rule of law.” The Myanmar crisis marks a first major test of Biden’s pledge to collaborate more with allies on international challenges.
- The U.S. Treasury slashed its estimated borrowing needs for the three months through March by more than analysts had anticipated, citing what it said was less spending than it expected before the start of the year. The Treasury’s estimates, released in Washington Monday, don’t reflect President Joe Biden proposed US$1.9 trillion package, and the department said the enactment of further COVID-19 relief could result in greater borrowing than it now projects. The Treasury now expects to borrow US$274 billion in January through March, some US$853 billion less than the Treasury projected in November, when it expected to borrow US$1.127 trillion in net marketable debt issuance over the quarter. The Treasury kept its cash balance estimate for the end of March at US$800 billion.
- In the US, the ISM manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years, strengthening expectations of a pick-up in inflation this year.
- The Boston Federal Reserve Bank President, Eric Rosengren stated that the US economy is still deep in a recession and more fiscal relief will be needed to reach a full recovery and help some of the unemployed find jobs.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 6.62%. Further, the yield on 2023 bond declined to 4.61% while that for the longer-dated 2030 issue fell to 8.63%.
In early trade on Tuesday, the US dollar is trading lower against the South African rand at R15.0266, while the euro is trading lower at R18.1598. The British pound has declined against the South African rand to trade at R20.5875.
By the close of trade on Monday, the euro declined against most of the major currencies.
- Europe’s economic pain is expected to worsen before it gets better, potentially boosting the popularity of populist leaders and the need for more action from the European Central Bank, analysts have said. While the International Monetary Fund upgraded its global growth forecasts last week, it said the outlook for the euro zone had deteriorated. The Fund cut its growth expectations for the region by 1 percentage point to 4.2% this year. Germany, France, Italy and Spain the four largest economies in the euro zone, all saw their growth estimates cut for 2021. The eurozone manufacturing growth remained resilient at the start of the year, however, its pace waned from December as renewed lockdown measures across the continent, alongside supply shortages, hurt activity.
- German retail sales plunged more-than-expected in December, as tightening lockdowns to curb the spread of COVID-19 stifled consumer spending in Europe’s largest economy.
- In contrast, the country’s manufacturing PMI rose in January.
In early trade on Tuesday, the euro advanced against the US dollar to trade at $1.2122, while it has marginally weakened against the British pound to trade at GBP0.8866.