Youtrading UK
Português Español русский
Register Login
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
No Result
View All Result
Youtrading UK
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
No Result
View All Result
Youtrading UK
No Result
View All Result

Santa rally nowhere in sight as lockdown fears trigger risk off start to week

by Joel Frank
20 December 2021
in Markets
0
Did Santa’s rally start early this December?
384
SHARES
9.7k
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp

Market Update

Risk appetite has started the week decisively on the back foot, with continued concerns about the rapid spread of Omicron, hawkish Fed rhetoric and US Democrat Senator Joe Manchin’s “no” to President Biden’s Build Back Better bill combining to act as the Grinch that stole the Santa Rally. Regarding the former, the Netherlands announced a return to lockdown on Sunday, putting pressure on its European peers to follow suit. Local newspapers in Italy reported that new restrictions are possible there as well and there is plenty of chatter in the UK about the possibility of further restrictions as government officials refuse to rule anything out. Meanwhile, in the US, health officials are urging Americans to get booster shots, wear masks and reconsider holiday travel plans.

Meanwhile, Fed Board of Governors member Christopher Waller was hawkish on Friday, saying that the main reason why the Fed sped the pace of its QE taper was so that the March meeting would be “live” for a rate hike. This has unsurprisingly seen traders up their bets on a March rate hike. Finally, US Democrat Senator Joe Manchin over the weekend said that he could not support the Biden administration’s $1.75T Build Back Better social spending bill amid concerns about high inflation amongst other things – without his vote, it cannot pass the Senate. As a result, and also as a reflection of expected disruption due to the spread of Omicron, Goldman Sachs downgraded its estimate for real GDP growth in the US in Q1 2022 to 2.0% from 3.0%.

Given all of the above, global equity markets have started the week lower, with the Stoxx 600 down about 1.5% and trading around 467, and S&P 500 futures down about 1.4% in the 4560s. In fairness, both have picked up from earlier session lows in the respective 462 and 4540 areas with some citing positive preliminary data from Moderna about the efficacy of its booster jab in boosting neutralising antibody levels versus the Omicron variant. But the mood remains very much one of risk off and traders will be assessing whether the arrival of US market participants ahead of the US open (usually from around 1100GMT) will make any difference. Liquidity conditions will be thinner than usual this week given the proximity to Christmas Day (on Saturday).

In terms of some bank commentary, according to MUFG, “investor risk sentiment has been undermined by further evidence over the weekend of the disruptive impact of the new Omicron COVID variant… The stricter lockdown in the Netherlands will heighten fears that similar measures will be adopted in other European countries in the coming weeks.” On a similar note, Deutsche Bank say “Omicron … remains one of the biggest issues for markets right now and has significantly clouded the outlook moving into year-end”, before adding that Manchin’s no to the Build Back Better bill “marks a significant blow for President Biden’s economic agenda”.

In terms of other asset classes, amid the risk off, crude oil markets are substantially lower, with WTI down about $2.0 and in the mid-$68.00s. According to oil broker PVM, “simply put, it is not a case of if but when governments impose tougher restrictions… Both crude markers are taking a sharp dive as the new week gets underway amid the prospect of a bigger than expected Omicron-spurred dent to global demand”. Yield curves in the US and Europe are a little more mixed, which is somewhat perplexing, with short-end yields suffering and longer-term yields flat. For reference, US 2s are down about 3bps to just above 0.60%, despite hawkish Fed rhetoric and last week’s hawkish meeting, while 10s are a tad lower just to the south of the 1.40% level. Turning now to FX markets, things are quite subdued ahead of a week of holiday thinned liquidity, though somewhat reflective of risk off. Risk-sensitive AUD, NZD, CAD and GBP are the laggards, while safe haven currencies CHF and USD are holding up modestly better. The Dollar Index is currently flat in the 96.50 area while the euro is the best performer in FX this morning amid some signals from ECB sources this morning of hawkish discontent at the bank’s recent lack of emphasis on upside inflation risks. These sources matched remarks from ECB member Wunsch over the weekend who said that the bank isn’t sufficiently recognising inflation risks.

Day Ahead

In terms of the day ahead, there isn’t anything of importance on the economic calendar for traders to keep an eye on. Rather, news about the spread of Omicron and the reaction of health and government officials will be the driving theme, as is already the case. Traders should be particularly focused on Europe, where there is chatter about further lockdowns in the UK and elsewhere. Further lockdowns of course pose a downside risk to risk appetite and risk assets.

Tags: DXYStoxx 600USA500WTI
Previous Post

EURUSD Technical Analysis – Could be preparing to drop hard

Next Post

The USDJPY hangs in the balance around 114.00

Next Post
USDJPY Technical Analysis – 112.50 Key Resistance Level

The USDJPY hangs in the balance around 114.00

CALL US

Categories
  • Commodities
  • Economy
  • Forex
  • Index
  • Insights
  • Markets
  • Opening of the Week
  • Sem categoria
  • Stocks
  • World

Site Map

  • Home
  • Markets
  • Charts
  • Economic Calendar
  • World
  • Economy
  • Insights
  • About Us
Português Español русский

A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!

Follow us on social media

Risk Warning

All financial products traded on margin carry a high degree of risk to your capital. They are not suited to all investors, please ensure that you fully understand the risks involved, and seek independent advice if necessary.

All Rights Reserved - YouTrading UK 2020

Privacy Policy and Terms and Conditions
  • Home
  • My Academy
    • Register Now
    • Login
  • Markets
    • Opening of the Week
    • Stocks
    • Commodities
    • Forex
    • Index
  • Charts
  • Economic Calendar
  • Economy
  • World
  • Insights
  • About Us
No Result
View All Result

© 2020 YouTrading UK - Leaders in Trader Training.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
__cfduid1 monthThe cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information.
_wpfuuid11 yearsThis cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon.
cf_use_obThis cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires.
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-advertisement1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
CookieDurationDescription
YSCsessionThis cookies is set by Youtube and is used to track the views of embedded videos.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
CookieDurationDescription
_ga2 yearsThis cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors.
_gid1 dayThis cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
CookieDurationDescription
_fbp3 monthsThis cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website.
fr3 monthsThe cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin.
IDE1 year 24 daysUsed by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.
test_cookie15 minutesThis cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE5 months 27 daysThis cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
CookieDurationDescription
_gat_UA-42160853-21 minuteNo description
cf_ob_infoNo description
CONSENT16 years 8 months 3 days 6 hours 2 minutesNo description
SAVE & ACCEPT
Powered by CookieYes Logo