Macroeconomic/ geopolitical developments
- Concerns that the Omicron strain of COVID-19 could contribute to supply chain disruptions and weigh on global economic growth have decreased over the past week.
- This has been due to positive sounding from vaccine providers and medical institutions regarding the efficacy of vaccines and that the variant could be less severe than previous strains.
- However, the Omicron strain does appear to be more contagious than the Delta variant and concerns are still high regarding possible hospitalisations.
- US inflation data released on Friday was with November CPI data showing a 6.8% rise year-on-year, the largest rise since 1982 with core inflation at 4.9%.
- Despite these very high numbers, financial markets had started to brace themselves for even more aggressive price pressures, leaving markets somewhat relieved.
Global financial market developments
- Global stock averages rebounded back towards November cycle/ record highs last week, as riskier assets saw relief from easing omicron fears and inflation worries.
- A quiet week for Forex markets, as the US Dollar marked within G3.
- Gold stayed negative in a range.
- Oil rebounded strongly, undoing negative pressures from its late November plunge and sets up positive.
- Copper again marked time last week but retains a negative tone within a broader range.
Key this week
- Geopolitical focus: Still watching for more details of the Omicron strain of COVID-19.
- Central Bank Watch: A busy week for the major, global Central Banks activity with the Federal Open Market Committee (FOMC) interest rate decision, statement and press conference on Wednesday, and the same from the Bank Of England (BoE) and European Central Bank (ECB) on Thursday, and then from the Bank of Japan (BoJ) on Friday.
- Macroeconomic data: The standout data points for the week are the UK Employment and inflation reports on Tuesday and Wednesday, US Retails Sales is also Wednesday, we get the global Markit Flash Purchasing Managers Index (PMI) data on Thursday and the German IFO Survey Friday.
| Date | Key Macroeconomic Events |
| 13/12//21 | Nothing of note |
| 14/12//21 | UK Employment report; EU Industrial Production; US PPI |
| 15/12//21 | China Retail Sales; UK inflation report (including CPI); US Retail Sales, Canada CPI; FOMC interest rate decision, statement and press conference |
| 16/12//21 | New Zealand GDP; Australia CPI and Employment report; global Markit Flash PMI; BoE and ECB interest rate decisions, statements and press conferences |
| 17/12//21 | BoJ interest rate decision, statement and press conference; German IFO Survey |
