Risk on returns as traders weigh the outcome of the Omicron variant

Market Update

As the new trading week commences risk trades are leaning towards being slightly more positive as traders and investors returning from the weekend after a heavily negative session last Friday.

Stock market futures are currently in the green across the United States and Europe, with the European heavyweight DAX40 surging towards the 15,300 level, marking a two hundred price ramp this morning.

Oil, which is a great proxy for risk is up big this morning, with both Brent and Crude oil gain close to three percent. This could also be on the back of reports that COVID-19 is not a deadly as feared.

The US dollar continues to keep in a strong position spot for the most part as the Fed is likely to stay on course for a quicker tapering pace and policymakers have recently been talking up the prospect of hiking faster as well.

Both the Australian dollar and the Canadian dollar have big weeks ahead the Reserve Bank of Australia and Bank of Canada deliver key interest decisions and policy statements before 2021 draws to a close.

Precious metals are both treading water this morning. Silver alongside gold are both undecided on the day and have yet to pick a meaningful direction. Again, FED taper fears are keeping both metals under pressure.

Cryptos saw a major bloodbath over the weekend, with many of the top digital assets, such as Bitcoin and Ethereum suffering losses of over ten percent. Ethereum is currently outpacing Bitcoin as highlighted by ETHBTC.

Meme coins, such as Dogecoin and Shibu Inu coin are also getting crushed during the latest move lower as so-called “Metaverse” related cryptos, such as Decentraland, suck much of the speculative money away from the meme coin market.

Day Ahead

Germany October factory orders
Amid supply and capacity constraints, German industrial orders are estimated to move down slightly in October, although do consider that this is a rather lagging data point at this stage.

UK November construction PMI
Construction activity is estimated to slow further as COVID-19 and the ongoing supply-side issues continues. This could have a slight impact on sterling today.

Eurozone December Sentix investor confidence
As fears surrounding the Omicron variant heighten across Europe a low reading is expected. As the powerhouse of Europe, Germany, suffers lockdowns and restrictions towards year-end a further pessimistic reading is expected.