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Holiday coverage – Holiday thinned trading continues

December 30, 2020by Nicholas Kabaso0
  • There is never a dull day in the United States. The Senate Majority leader Mr. Mitch McConnell yesterday put off a vote on increasing the amount of relief provided to individuals from $600 to $2000; he also asked senators to override President Trump’s veto of a defense bill.
  • This is significant as it seems President Trump is being shunned as he enters the final stage of his Presidency. Trump has some three weeks left before he vacates for Joe Biden, and many political commentators suggest that Trump’s membership of the Republicans will be in doubt as he exits, given the potential for the collateral damage that Trump brings with him. 
  • COVID-19 remains at the forefront of headlines globally; there are mutations occurring across the globe at present, with different strains detected in South Africa and the United Kingdom earlier in December. The first known case of a highly infectious COVID-19 mutation was recorded in Colorado on Tuesday, and this is concerning for the United States, which is struggling to get a grip on its second wave. President-Elect Joe Biden has had some sombre words for Americans, saying that it could take years for most Americans to be vaccinated at the current roll-out rates.
  • The global financial markets have been mixed, with some asset classes such as equities seeing some profit-taking. Asian equities have had a strong run of late, and it is not surprising to see investors take some money off the table.
  • Investors continue to shun the USD. The EUR-USD has hit an intra-day high of 1.2294 this morning, a level last seen in April 2018. Cable is bid this morning, as is the AUD and higher beta currencies.  The USD Index has solidified its position below the 90 handle, and the expectation is that there are more losses to come.
  • Gold has received a boost from the weaker USD, with the yellow metal holding north of the $1880.00/oz level while silver, platinum, and palladium are also on the front foot.
  • Regionally, the ZAR experienced some mild pressure yesterday as investors weighed up the impact on the economy of the latest lockdown measures. This morning we have, however, reversed that trend, and the ZAR is bid once again.

In terms of the ZMW, we have the currency remaining contained around current levels. Liquidity is hampered given the end of the year festivities and this may remain the case for the early part of January 2021 until corporates and investors return to their desks.

Nicholas Kabaso

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