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Zambia reimposes restrictions for travellers

May 24, 2021by Nicholas Kabaso
  • The Zambian government on Friday flagged a potential third wave of the coronavirus pandemic following a rise in daily cases. The country has seen an increase in daily cases in recent days after seeing a dip in recent months. According to the government, the surge in cases is being propelled by the cold weather, laxity in adhering to public health measures, and the emerging campaign activities ahead of the August 12 gen-eral elections.
  • Meanwhile, Zambia has reintroduced the coronavirus test on arrival and the mandatory 14-day quarantine for travelers from 15 countries., The affected countries are South Africa, Tanzania, Kenya, Ethiopia, Egypt, Tunisia, India, Iran, Turkey, France, Germany, Russia, Italy, Brazil, and Ar-gentina. The list is expected to be reviewed and updated regularly.
  • It is a quiet start to the week in Zambia amid an empty data card today. Later in the week, CPI and trade readings are in focus. The former will provide further insight into the development of price pressures in the economy.
  • Industrial metals have responded to further warnings from Beijing. The Chinese regulator has fired a shot across the bow of industrial metal companies saying that they need to maintain “normal market order” following significant gains in metal prices this year. Reuters reported the following- The NDRC, China’s top economic planner, along with the industry ministry, the state-owned assets regulator, the State Administra-tion of Market Regulation, and the China Securities Regulatory Commission held the talks on Sunday with major domestic commodity compa-nies and urged them not to drive up prices, according to the statement. The statement warned that companies “should not collude with each other to manipulate market prices … hoard goods and drive up prices.”  The regulators pledged they would monitor the commodity market and strengthen inspections for both futures and spot markets.
  • Not surprisingly we have seen base metals tumble this morning in the Asian session. The benchmark 3m copper price was down some 0.3% at $9853.50/tonne after falling 1.67% on Friday. Shanghai copper was down 1.4% at CNY71590/tonne. 
  • Looking ahead we still hold the view that the broader macro picture on base metals is unchanged, and what we are seeing is the froth being removed from the market.
  • Stateside, the 6th Jan Capitol Riot remains a thorn in the side of the Republicans as they clashed on Sunday over whether an independent commission is needed to investigate more thoroughly. The measure to establish the commission passed last week with 35 Republicans voting in the House of Representatives in favour of the commission. Now the topic shifts across to the Senate, and it is likely to prove a contentious issue that may well generate enough support to pass. However, there are many disparate views on the implications this could have over the longer term, politically speaking.
  • US Treasury yields slipped a little further on Friday despite a report which showed that US manufacturing activity rose to the highest levels in more than a decade. One or two data releases have alluded to a bumpy recovery and the possibility that the Fed will stop purchasing bonds that will detract from the broader business cycle. However, it will be interesting to see whether the dip in yields is sustained given the pro-spects for a strong rise in global inflationary pressures and the likelihood that stronger economic growth in time, will help boost prices given how monetary stimulus has been so aggressive. Against this backdrop, today’s Chicago Fed activity index will hold some interest.
  • While economic activity in the US is still below pre-pandemic levels, incoming data shows that the recovery is well underway. The combination of aggressive monetary and fiscal stimulus against the backdrop of significant progress on the vaccination front, which has allowed for the reo-pening of the economy, is helping to support a swift recovery in economic activity in the US. While the Chicago Fed activity index slumped in February amid a new wave of infections, activity rebounded in March and is likely to remain buoyed in expansionary territory in April. Going forward, the pace of economic recovery will remain dependent on how quickly the US population can build immunity to the coronavirus to a point where the economy is able to be fully reopened. The degree of stimulus will also be a significant factor determining the pace of econom-ic growth in the months ahead.
  • In the FX markets, consolidation was the order of the day for the Kwacha as it closed little-changed. Note, the Kwacha has traded at record lows and is likely to continue to do so in the near term. However, in the week ahead, the depreciation is expected to be at a slower pace.
  •  Meanwhile, the USD remains on the defensive this morning as it struggles to make back any ground, especially with US Treasury yields still dipping and the authorities confirming that they are in no hurry to remove fiscal and monetary stimulus. Technically, the bias remains to the downside and with no significant data scheduled for release today, investors may well tread water for a little while longer as they search for a catalyst to the move.
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Nicholas Kabaso

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