LOCKDOWN LEVEL 1 Ver3 [ DAY 24]
TOTAL DAYS 393 – 7 HOURS 38 MINUTES
Vaccine rollout day 80 / J & J VACCINE DAY 68 [SUSPENDED DAY 10]
By the close of trade on Thursday 22nd April 2021, the South African rand weakened against the US dollar. Tokyo Sexwale held a rather explosive news conference that has the Nation gasping at the allegations that were being levelled. Scam or No scam we need to know the truth.
- Russia announced on Thursday it was ordering troops back to base from the area near the border with Ukraine, apparently calling an end to a buildup of tens of thousands of soldiers that had alarmed the West. The currencies of both Russia and Ukraine rose sharply after the announcement, signalling relief among investors just hours after Russia also ended war games in Crimea, the peninsula it occupied and annexed from Ukraine in 2014. A confirmed pullout of the troops brought in on top of the permanent contingent will likely be welcomed by Western countries.
- In the US, the number of people filing new claims for unemployment benefits fell to a 13-month low for the week ended 16 April, suggesting layoffs were subsiding and thus strengthening expectations for another month of blockbuster job growth in April as a re-opening US economy unleashes pent-up demand. President Biden has tweeted that a capital gains tax of 43.4% is on the cards for the wealthy, For New Yorkers, the combined state and federal capital gains rate could be as high as 52.22%. For Californians, it could be 56.7%.
- President Joe Biden’s likely proposal to nearly double the tax on capital gains lopped a quick 30 points of the S&P 500. Wall Street traders, predictably focused on the policy’s implications for investing, said it was too soon to panic, but that prospects of a higher levy on stock profits could foment near-term selling as investors look to skirt a higher rate. The benchmark index for U.S. equities slid from about 4,180 to 4,150 in the minutes after Bloomberg reported Biden will propose almost doubling the capital gains tax rate to 39.6% for those earning $1 million or more, an increase from the current base rate.
- Existing home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.
- The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 7.25%. Further, the yield on 2023 bond declined to 4.71%, while that for the longer-dated 2030 issue rose to 9.12%.
In early trade on Friday 23rd April 2021, the US dollar is trading marginally lower against the South African rand at R14.3122, while the euro is trading marginally higher at R17.2012. The British pound has gained against the South African rand to trade at R19.8266.
By the close of trade on Thursday, the euro advanced against most of the major currencies.
- The Australian federal government on Wednesday used a new anti-China law to tear up agreements signed between the state of Victoria and China on the Belt and Road Initiative (BRI), in an unreasonable and deliberate provocation against China. Not surprisingly, the move has drawn the ire of officials in Beijing. On Thursday, a spokesperson for the Chinese Foreign Ministry urged Australia to immediately reverse its wrong decision and stop irresponsible words and deeds regarding the China-Australia relationship, or China will definitely respond “firmly and forcefully.”
- China is taking small steps to undermine the global role of the dollar. The goal is to replace the dollar with Chinese technology solutions to match China’s increasing financial clout. Recently there have been major developments. The first is using the renmimbi central bank digital currency for cross-border payments with a number of central banks. The second is creating an attractive alternative to the International Monetary Fund’s lending facilities in Asia. And the third is the partnership between the People’s Bank of China and SWIFT to operate financial messaging.
- The European Central Bank (ECB) decided to keep its policy unchanged, while market players look for clues on when the central bank’s massive monetary stimulus might start to be wound down.
- Prime Minister Yoshihide Suga is set Friday to declare a state of emergency in Tokyo and the western Japan prefectures of Osaka, Kyoto and Hyogo in an effort to curb a surge in COVID-19 during the upcoming Golden Week holidays. Tougher restrictions such as having establishments that serve alcohol temporarily close and shutting down major commercial facilities will be in place from Sunday through May 11. The emergency declaration, covering roughly a quarter of Japan’s population of 126 million and about a third of its economy, comes with just three months to go until the Tokyo Olympics begins.
- Asian shares rose on Friday after the European Central Bank left policy unchanged, extending a rebound following a sharp selloff earlier in the week, but gains were capped as investors considered the impact of a possible U.S. capital gains tax hike. The ECB’s decision to keep copious stimulus flowing came despite its prediction of a strong rebound in the euro zone economy from mid-year as COVID-19 infections are brought under control.
In early trade on Friday, the euro has advanced against the US dollar to trade at $1.2036, while it has weakened against the British pound to trade at GBP0.8722.
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 17]
TOTAL DAYS 386 – 7 HOURS 35 MINUTES
Vaccine rollout day 73 / J & J VACCINE DAY 61 [SUSPENDED DAY 3]
By the close of trade on Thursday 15th April 2021, the South African rand strengthened against the US dollar. In South Africa the Health Minister launched the Electronic Vaccination Programme which can be found at https://vaccine.enroll.health.gov.za/#/
- The U.S. dollar struggled to rally on Thursday despite very strong U.S. economic reports. According to the latest releases, the U.S. economy roared back to life in March and early April. Retail sales, the most anticipated piece of U.S. data this week blew expectations as stimulus checks and vaccinations fueled robust demand. Consumer spending jumped 9.8 percent in the month of March, easily outpacing the market’s 5.9 percent forecast. This was the strongest increase since May of last year. Gas and auto sales contributed to the rise but spending ex autos still rose 8.4 percent.
- Initial claims for state unemployment benefits decreased to the lowest level since mid-March 2020 for the week ended 10 April.
- In response to the rocket fired from Gaza at Israel earlier tonight, IDF fighter jets and attack helicopters just struck a Hamas weapons manufacturing site, a weapon smuggling tunnel and a military post.
- China’s economy grew at a record pace in the first quarter, official data showed on Friday, expanding 18.3% from a year earlier as the recovery from the coronavirus slump accelerated. The growth in gross domestic product (GDP) was slower than the 19% forecast by economists in a Reuters poll, and followed 6.5% growth in the fourth quarter last year. It was the strongest growth since at least 1992 when official quarterly records started. China’s economy has largely recovered from last year’s COVID-19 induced paralysis, fuelled by global vaccination progress, resilient exports and government stimulus.
- Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took sweeping action against 16 entities and 16 individuals who attempted to influence the 2020 U.S. presidential election at the direction of the leadership of the Russian Government. This announcement follows the Intelligence Community’s (IC) “Assessment of Foreign Threats to the 2020 U.S. Federal Elections.” The IC assessment addresses the intentions and efforts of key foreign actors, including Russia, to influence or interfere with the U.S. elections and undermine public confidence in the election process.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.25%. Further, the yield on 2023 bond declined to 4.97% while that for the longer-dated 2030 issue fell to 9.09%.
In early trade on Friday, the US dollar is trading higher against the South African rand at R14.2072, while the euro is trading higher at R16.9866. The British pound has gained against the South African rand to trade at R19.5572.
By the close of trade on Thursday, the euro declined against most of the major currencies.
- German consumer price index (CPI) rose in line with market expectations on a monthly basis in March.
- This week, the ECB published an overview of the consultation responses it received on its digital euro survey. The results show a variety of demands a digital euro would need to fulfil, including privacy, security, low costs and ease of use
In early trade on Friday 16th April 2021, the euro has slipped against the US dollar to trade at $1.1957, while it has gained against the British pound to trade at GBP0.8722.
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 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.