- Moderna says booster dose of its COVID-19 vaccine appears protective vs. Omicron
- German govt to restrict private gatherings of vaccinated and recovered to 10 people max
- UK's Johnson: We will rule nothing out in the fight against covid
- WHO chief scientist says many monoclonal treatments won't work against omicron
- UK shopper numbers down 8.5% in central London over the weekend
- UK reports second-highest daily covid tally
- Manchin doesn't sound like he will be in any mood to make a deal any time soon
- The majority of UK adults think it likely that Boris Johnson will not be PM by the end of 2022
- UK and other nations express grave concern over the erosion of democracy in Hong Kong
- Russia's Novak says it is too early to speak of the feasibility of changing parameters of OPEC+ deal
- OPEC+ compliance with oil production cuts rises slightly to 117% in November
Markets:
- Gold down $7 to $1790
- US 10-year yields up 2 bps to 1.42%
- WTI crude oil down $2.20 to $68.23
- S&P 500 down 63 points to 4558
- Euro leads, CAD lags
The marked kicked off the week in a decidedly bad news on omicron worries combined with the failure of Build Back Better in the US. On the latter, we did get some more encouraging news later with the White House and Manchin hinting at room to maneuver, albeit with a new piece of legislation. That helped to shore up sentiment but, in truth, stocks were in a much worse mood than fixed income and FX, where the moves haven't been extreme.
EUR/USD rose to 1.1303 but stalled late in London and gave some back late in a drift to 1.1276.
USD/JPY narrowly hit a session low at the London fix but rebounded later and is on track to finish the day flat.
Cable traders were juggling headlines around lockdown measures and virus curbs but none of them moved markets a great deal. The tone was negative though and there's a growing likelihood of home visitor limits starting Dec 28. Policymakers are watching hospitalizations in London, which rose to 1196 in the week through Dec 15 from 841 in the week prior. Those were still early days of omicron and hospitalizations lag infections by around 10 days so the next slate of data will be key. Still, cable has been taking infections in stride.
The loonie was hit a bit harder and USD/CAD touched narrowly above the August highs to the best levels of 2021. Oil was smashed early before recouping about half the gains. The loonie didn't stage much of a comeback but is currently below the key 1.2950 level.
AUD/USD fared better, perhaps with China lowering the LPR by 5 basis points. Still, if we're worried about China during omicron, it should come through AUD a bit more clearly. It fell as low as 0.7083 before bouncing by 30 pips.
