LOCKDOWN LEVEL 1 Ver3 [ DAY 27]  

TOTAL DAYS 396 – 7 HOURS 45 MINUTES

Vaccine rollout day 83 / J & J VACCINE DAY 71 [suspended day 13]

 By the close of trade on Friday 23rd April 2021, the South African rand strengthened against the US dollar.

 In the US, manufacturing PMI increased to its highest reading since the series started in May 2007 in April.

 New home sales surged on monthly basis in March.

 Iran’s Military blames Israel for drone attack on an oil tanker ablaze.  The blaze aboard the oil tanker near Syria’s Banias refinery has been extinguished late Sunday following a suspected drone attack which was widely reported as coming “from the direction of Lebanese waters” in the words of Syria’s oil ministry. The Guardian is citing regional sources to say at least three among the crew were killed. While the tanker was first identified as Iranian, Tanker Trackers said in a tweet that “the tanker seen burning today off the coast of Banias is not an Iranian vessel” but Beirut-registered. Iranian state media had also denied that it was Iranian ship.

 The yield on benchmark government bonds mostly rose on Friday. The yield on 2026 bond rose to 7.26%. Further, the yield on 2023 bond declined to 4.68%, while that for the longer-dated 2030 issue rose to 9.17%.

 In early trade on Monday 26th April 2021, the US dollar is trading lower against the South African rand at R14.2642, while the euro is trading marginally lower at R17.2733.  The British pound has gained against the South African rand to trade at R19.8322.

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

 Italy has reached a deal with the European Commission over its Recovery Plan, Prime Minister Mario Draghi told the cabinet late on Saturday, after days of intense talks, paving the way for it to be submitted to Brussels by the end of April. Italy plans to spend more than 220 billion euros ($266 billion) from European Union and national funds to revive its coronavirus-battered economy.  Economy Minister Daniele Franco unveiled the plan’s details to the cabinet late on Saturday, after it was delayed for 12 hours to allow negotiations to proceed with Brussels.

 Britain looks set to see faster economic growth than the United States this year as the country races ahead with its vaccination programme after its slump in 2020, Goldman Sachs said on Sunday. The bank said in a note to clients that it now expects British gross domestic product to grow by a “striking” 7.8% this year, “above our expectations for the U.S.” A Reuters poll of analysts published on April 13 showed an average forecast for growth of 5.0% in the UK, the world’s fifth-biggest economy in 2021. The International Monetary Fund has projected a 5.3% expansion.

 Facing criticism as COVID-19 continues to rise across Japan, Prime Minister Yoshihide Suga took another hit on Sunday after his Liberal Democratic Party lost the first national elections since he took office. Given his precarious position, Suga is unlikely to call a general election any time soon and is in danger of losing power when his current term ends in September. Tougher restrictions to curb infections took effect in Tokyo and the western prefectures of Osaka, Kyoto and Hyogo on Sunday after the government declared a state of emergency over the pandemic for the third time.

 The eurozone’s recovery from its pandemic-induced economic downturn was much stronger than expected in April, as the service industry adapted to lockdowns and made a surprise return to growth.

 German factories continued to churn out goods at a near-record pace in April, even as activity in the services sector remained sluggish due to coronavirus curbs, giving an upbeat outlook for Europe’s largest economy.

 In early trade on Monday 26th April 2021, the euro has advanced against the US dollar to trade at $1.2232, while it has marginally weakened against the British pound to trade at GBP0.8766.

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.

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 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.