TREASURY BILL AUCTION: The Zambian Central Bank will have on offer K950 million worth of short dated government treasuries on Thursday 06 Dec. This is the pen ultimate sale of the year. We expect another under-subscribed auction with infinitesimal shifts in the yield curve. This perceived performance will be on the back of liquidity concerns in the market. Appetite will skew in the 1 year which is currently the highest paying point in the term structure of the Kwacha curve.
OPEC VIENNA MEETING: All flights lead to Vienna for the long awaited OPEC club on 06 Dec where member states will try and agree on providing support to crude prices in light of the oil bears. Saudi Arabia the de facto leader will drive the agenda of possible production cuts with the support of Russia. Markets have already priced in a production cut well ahead of the meeting and in addition to positive sentiment from the trade truce WTI futures are 4.8% higher at $54/bbl. while ICE Brent is 5.4% bullish at $62/bbl. today. Of what relevance is this to Zambia? This could spell what the next fuel price would be given the outcome effects of the crude markets. Energy RegB will not adjust prices lower but the crude price when current stock depletes will determine what the pump price will be post review.
PURCHASING MANAGERS INDEX: London based IHS Markit will release business pulse indexes for African and global economies. Zambia’s PMI for Nov. 18 will be released this week at which headline print of 44-46 is projected as private sector activity is still out of the woods. Cost push inflationary pressure will still be driver of higher selling costs for inputs affecting business pulse.