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Global attention shifts to FOMC meeting

January 27, 2021by Nicholas Kabaso0
  • First Quantum Minerals yesterday announced that it had achieved its highest ever yearly copper production, with output rising by 11% to 779000t in 2020. Record-breaking production was reported at Sentinel, in Zambia and other operations were resilient, particularly Cobre in Panama. Sentinel produced a record 251000t in 2020, which was 31000t more than the comparable period of 2019, reflecting a significant in-crease in throughput to $57mn tonnes for the year. Cobre copper production reported an increase of 6000t to 66000 in Q4 2020 compared to Q4 2019. This was despite the mine operating under restrictions and a planned 7-day shutdown in October.
  • Meanwhile, China Iron and Steel Association sees imports into the country rising in 2021 while exports are expected to fall given the tepid de-mand as a result of the COVID-19 pandemic. “Currently (the) global pandemic has not been controlled fundamentally, (and the) recovery of in-ternational steel demand and production still faces many difficulties,” China Iron and Steel Association’s (CISA) Vice Chairwoman Qu Xiuli said.
  • Stateside, America is quickly moving to secure what vaccine doses it can and aims to have enough vaccine secured for the entire population by summertime. The vaccine programme is under way and although more sluggish than anticipated, will become more efficient and gather fur-ther momentum. The Biden administration is aiming to have 150mn doses administered in his first 100-day sin office. Given the natura immuni-ty that has grown courtesy of the high infection rates, combined with the vaccine roll-out, the coming months will likely see a sharp drop-off in infections, just as is happening in the UK.
  • A group of 45 Senate Republicans tried to halt former President Trump’s impeachment trial yesterday. The effort failed and through the com-ing weeks, the trial will go ahead. Whether there are enough votes within Congress to convict Trump remains to be seen, but there is growing belief that there might be, which would bar Trump from ever running for public office again.
  • US consumer confidence rose modestly in Jan despite the high levels of infections and the lockdown disruptions that unfolded. The Confer-ence Board’s consumer confidence index rose to 89.3 in Jan from 87.1 in Dec. Although an improvement, the data is still exceedingly weak, with the household perceptions of business and labour market conditions particularly poor falling to 84.4 in Jan from 87.2 in Dec. That being said, future expectations improved suggesting that households and businesses are now starting to look beyond the pandemic.
  • Shifting to the FX markets, consolidation was the order of the day with the USD-ZMW closing little-changed. Ahead of the FOMC decision and statement today, the USD appears to be in a holding pattern as investors await guidance from Fed Chairman Powell. The USD has been range bound in recent trading sessions and although the expectation is that the Fed will leave monetary policy unchanged, it will be the tone of the accompanying statement and the guidance offered by Powell that will determine how the USDE trades. At the moment, it appears to have a slight dovish undertone to it.

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Nicholas Kabaso

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