- Zambia’s Health Minister Jonas Chanda yesterday stated that the country was bracing for the third wave of the coronavirus pandemic and that the government was trying to do everything possible to avert it. Chanda was quoted as saying “Government is putting in all preventive and treatment measures since we remain with yet a small window in which to ensure we are adequately prepared to avert the situation”. On the vaccination front, Chanda said that while there will be no mandatory mass vaccination of people the program will be conducted in a cautious, voluntary and phased manner after it was agreed on in principle for the introduction of the vaccine which still awaits cabinet approval.
- The price of copper has fallen this morning as inventory levels in the LME tracked warehouses rose to their highest level in more than two months. The benchmark 3m LME contract dipped below the $8960.00/tonne handle while the benchmark May Chinese contract fell by as much as 1.5% in Asian trade. The LME inventories jumped by 12% to 103 900 in one session while ShFE warehouses are reporting stocks of some 171 794 tonnes, a level last seen in Sept 2020.
- Stateside, it is important to note that stimulus cheques to households will begin today and offer some much-needed relief. It also comes at the perfect time to bolster consumptive demand, after the blow that was suffered in Feb and will assist in bolstering overall demand through-out the economy. It is also a factor that will be taken into consideration by the Fed through the two-day meeting currently under way.
- The main event of the day will undoubtedly be the latest decision and guidance from the FOMC. The Fed is expected to maintain its current monetary policy stance today, reaffirming the central bank’s commitment to supporting the economy’s recovery following the pandemic. The recent stimulus announcements and the improving growth trend in the US Feb’s data notwithstanding, has however, improved the outlook for the economy going forward and will have potentially alter the Fed’s balance of risks assessment at the margin. Expectations of faster infla-tion have been rising and spooked some investors, but the Fed will put this down to temporary factors and a repricing of growth expectations, meaning that they will not signal the need to increase rates anytime soon.
- In the FX markets, the sell-off in the local unit persisted yesterday amid sustained demand for hard currency and scanty inflows. Meanwhile, many currencies are marking time and treading water ahead of the FOMC decision this evening and the guidance offered. The USD is resisting the temptation to head much higher and although exhibiting a slight upside bias, remains largely range bound. Whether or not the Fed choos-es to lift growth projections through the years ahead may well be a factor that drives the USD, while how it plans to deploy QE through the remainder of the year and whether it will pursue some form of yield curve control might be another.
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