We're down to the nitty-gritty in 2021 trading so I hesitate to attach any fundamental themes to market moves but sentiment is clearly improving on omicron as data begins to mount that it's less severe.
That sets up an outcome where broad infections are quickly fought off and add to herd immunity, while also encouraging broad take-up of boosters. How it all shakes out with delta and further variants is unclear but the tide is clearly turning against lockdown measures so I suspect this is the last time we'll see schools close.
The big worry remains China. A case in Dongxing resulted in a shutdown today and the outbreak in Xi'an continues to percolate. I don't know how they're going to maintain covid-zero in a world of endemic omicron.
That's a particular risk to AUD, given the path of exports. In any case, the aussie isn't overly worried today as it hits a one-week high and continues to strengthen even with broader sentiment stable. Last week's high of 0.7224 is resistance and it would take a herculean effort to get it through that before Christmas in this type of market.
