- Zambia yesterday banned the importation of onions and potatoes in a move meant to empower local farmers in order them to establish a marketplace. According to an official from the Ministry of Agriculture, Zambia produces enough onions and potatoes to meet domestic de-mand.
- Base metal trading was rather quiet this morning as much of Asia experienced a public holiday. Chinese markets closed yesterday marking the start of the Lunar New Year celebrations and during this time manufacturing activity drops off sharply.
- Copper took a breather yesterday with the metal closing down some 0.23% on the day at $8280.5/tonne. Its not surprising to see investors take some money off the table given the strong run seen of late. The copper market is still in backwardation indicating near term supply issues. Currently the spot price is trading at a 8.75$ which is substantially lower than the highs of $17.50 recorded this week.
- Stateside, the Democrats put forward their case at the impeachment trial and it is very clear that the most pressing objective is to prevent Trump from running in the next elections. They pressed their point that Trump incited the insurrection and should be held accountable. The majority of Republicans will not however vote in favour of conviction and will soon hear from the Republicans that will no doubt continue questioning its constitutionality but will also highlight the double standards applied by the Democrats. The concern is that US politics was al-ready well divided before this, and will be even more divided after this.
- So divided are US politics currently, that a splinter group within the Republican party is considering forming a third party. Whether this ever gains enough support from a nation that has always been split across two main parties is questionable, but it does highlight just how fractious US politics have become. The current impeachment trial is making matters worse not better and while the Democrats might feel like a more cohesive party for now, a rejuvenated form of the Republican party that comes out of this might be an even larger threat in the next elections come 2024.
- Richmond Fed president Barkin has reiterated his view that the US economy is set to recover through 2021 regardless of whether herd-immunity has been reached or not. As more people are vaccinated and gain the confidence to normalise their consumptive habits, that nor-malisation will be reflected in an improved economic performance. On that point, President Biden has warned that not enough vaccines will be available to vaccinate everyone by the summer, but that a further 200mn doses have been ordered.
- Shifting to the FX markets, consolidation was the order of the day as Kwacha closed little-changed at elevated levels. The local unit is seen as remaining on the defensive next week as demand for hard currency continues to surpass supply.
- Some weaker than expected jobless claims data yesterday has ensured that the USD has remained on the defensive and unable to make a strong recovery. The USD is now headed for a weekly loss with the Biden administration’s efforts to stimulate likely to play a key role in keep-ing USD gains contained. Head into the weekend and given the thinner liquidity conditions in the east, the USD is set to further consolidate its recent retreat, leaving much of the focus on the surge in Bitcoin as it increasingly appears to be headed into the main stream.
Please click here to access the full Market Watch