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Zambia Market Watch – Quiet start to the week expected

December 27, 2021by Nicholas Kabaso

  • Today sees the return of some market participants post the Christmas festivities over the weekend but liquidity is severely hampered as many commonwealth countries continue with the Christmas break today with some such as Australia and Canada extending this to tomorrow as well.
  • For those that have re-joined the market today we expect the Omicron variant of COVID-19 to be the driver of what little price discovery there is with an element of risk off coming through in Asia. Holiday plans have been upended in the United States with more than 1300 flights cancelled as the virus thinned out the number of available crews, while Reuters reported that several cruise ship had to cancel stops after outbreaks on board. The news vendor went on to report the following – Dr. Anthony Fauci, the nation’s top infectious disease official, warned of rising U.S. cases in coming days and potentially “overrun…hospitals, particularly in those regions in which you have a larger proportion of unvaccinated individuals.”  “It likely will go much higher,” he said of the Omicron-driven surge even as President Joe Biden last week unveiled new actions aimed at containing the latest wave and continued urging vaccinations and other prevention strategies.
    What is positive is that the Omicron variant may be the final sting in the tail from COVID-19 as both the virus and the host learn to live with each other. The pandemic becomes endemic and like influenza becomes part of human existence.
  • From a data perspective, Japan released November Retail Sales this morning recording a print of 1.9% year on year versus a market forecast for a 1.7% rise. The question going forward is obviously the impact of Omicron on December sales, but for now research indicates that consumers have not been overly concerned with the virus as foot traffic has increased.
    Moving over to the financial markets we have the dollar remaining anchored near the bottom of its range. The USD Index is currently marking time just below 91.10,  Brent crude has rebounded marginally and metals are flat.
  • On the data front, there is nothing out locally, internationally it is rather thin with only the Dallas Fed Manufacturing Activity reading for December on the cards. South Africa is out for a holiday which will add to the lack of interest to trade

Nicholas Kabaso

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