• GLOBAL CAPITAL MARKETS OVERVIEW:

The U.S. stock market only had a half-day market on the day following Thanksgiving. The discovery of a new variant of the virus in South Africa triggered panic selling in the market, and the three major indexes fell by more than 2%. The VIX Volatility Index, commonly known as the Panic Index, surged 54%. The Dow Jones index gap opened more than 400 points lower, fell sharply at 1055 points, hit 34749 points, closed at 34899 points, down 905 points, or 2.53%, the most significant one-day drop since October last year. The Standard & Poor's 500 Index fell 2.5% to a low of 4585 points and finally closed at 4594 points, down 106 points, or 2.27%, the most significant one-day drop since February last year. The Nasdaq index, dominated by technology stocks, closed at 15,491 points, down 353 points, or 2.23%. Aviation and travel-related stocks plummeted, cruise operators, Carnival and Royal Caribbean Cruises fell more than 10%. Delta Air Lines and American Airlines fell more than 8%. Boeing fell by more than half. All of the 11 major S&P sectors, except for the healthcare sector, fell more than 1%. Worried about slowing economic activity and lower investors’ expectations for interest rate hikes in the United States, the S&P Bank Index fell nearly 4%. This year’s best-performing energy stocks fell 4%, the most significant decline in more than eight months due to crude oil futures. The price plummeted. The health care sector lost 0.45%, driven by vaccine manufacturer Pfizer's stock price rose more than 6% and hit a new high, Modena's stock price soared nearly 21%. Over the week, the Dow fell almost 2%, the benchmark index fell more than 2%, and the Nasdaq fell more than 3%. European stock markets closed sharply lower on Friday in a broad sell-off. A new variant virus that may be vaccine-resistant emerged, sparking concerns about a further blow to the global economy and pushing investors to withdraw at higher risk assets. The pan-European STOXX 600 index closed down 3.7%, the worst one-day performance since June last year, and the volatility index of significant stock markets hit the highest in nearly ten months. The STOXX 600 index closed 4.5% lower last week. Little is known about the variant viruses detected in South Africa, Botswana, and Hong Kong. Still, scientists say the variant has an unusual group of mutations that may evade immune responses or make it more transmissible. The French CAC-40 index tumbled 4.8%. The UK's FTSE 100 index closed down 3.6%, Germany's DAX index fell 4.2%, and Spain's IBEX index fell 5.0%. Travel and leisure stocks tumbled 8.8%, their worst single-day performance since March last year. It was also the worst-performing sector last week, dropping 11.6%. The fall in eurozone bond yields put pressure on bank stocks, which fell 6.9%. Oil and gas stocks tumbled 5.8%, miner stocks dropped 5.0%, oil and metal prices plummeted, and reports of new variants intensified concerns about the economic slowdown. The decline in technology stocks was relatively small due to the rise in home stocks. Defensive sectors such as healthcare stocks and utility stocks saw minor declines. The increase in the price of external gold, worries about the new variant of the virus hit risk appetite, and funds flowed into safe-haven assets, which pushed up the price of gold. Spot gold once rose to US$1815.26 per ounce, but the increase narrowed earlier to US$1,791.97 per ounce, an increase of 0.2%. New York gold futures once reached a high of US$1816.3 per ounce, rising nearly 2%, and closing gains narrowed significantly to 0.1%, but for the entire week, they fell by about 3.6%. The discovery of a new virus variant in South Africa has worried the market or restrained economic growth and fuel demand. Crude oil futures prices have plummeted by about 12% or more and have fallen for five consecutive weeks. London Brent oil futures closed at US$72.72 per barrel, down US$9.5, or 11.6%, the most significant one-day drop since April last year, falling more than 8% throughout the week. New York oil futures fell below 70 US dollars per barrel to close at 68.15 US dollars, down 10.24 US dollars, or 11.1% and lost more than 10% last week. Japan's Nikkei Index fell to its lowest level in a month on Friday as a new variant of the new crown virus discovered in South Africa caused concerns. The Chinese government asked China to call News of car giant Didi Chuxing’s delisting from New York also hurt popularity. The Nikkei index fell 2.53% to 28,751.62 points, the lowest closing price since October 25 and the most significant one-day drop in five months. The broader Topix stock index fell 2.01% to a six-week closing low of 1,984.98. The Nikkei Index fell 3.3%, and the Topix Stock Index fell 2.9%, marking its most significant weekly decline since the last week of September. The variant virus discovered in South Africa may evade the immune response, prompting the UK to rush to impose travel restrictions on South Africa. This news hit the travel-related stocks the most, which had benefited from a surge in domestic consumption due to the successful containment of the epidemic. The Topix Air Transport Index fell 5.4% to a seven-month low, while the Topix Land Transport Index, mainly composed of railway operators, fell 2.9% to a one-year low. All Nippon Airways fell 4.5% after the airline raised funds through the sale of convertible bonds, a move that highlighted the difficulties faced by the industry. Keisei Electric Railway fell 6.3% among the railway operators, the worst performance among the Nikkei stocks. Tokai Railway (JR Tokai) fell 3.3%, while West Japan Railway fell 3.2%. SoftBank Group plunged 5.2% after Bloomberg News reported on Friday that Chinese regulators had asked executives of ride-hailing giant Didi Chuxing to formulate a plan to delist from the US Stock Exchange because of concerns about data security. The Japanese conglomerate is a significant investor in U.S.-listed Chinese technology companies, including Didi and Alibaba. The Shanghai Composite Index closed at 3564 points, down 20 points, or 0.56%. The Shenzhen Stock Exchange Component Index closed at 14,777 points, down 50 points, or 0.34%. The ChiNext Index rose nearly 0.8% in the early stage, briefly rose above 3,500 points, and then fell to close at 3468 points, down 5 points, or 0.16%. Last week, Shanghai stocks rose 0.1%, the Shenzhen Stock Exchange component index rose nearly 0.2%, and the ChiNext stock index rose almost 1.5%.

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- US: U.S. Treasury yields hit the most significant drop since the outbreak, and after the emergence of a new variant of the virus in South Africa, funds flowed into safe-haven assets. The 10-year Treasury bond yield fell 16 basis points to near 1.483%, the most significant one-day drop since March last year. The yield on the two-year Treasury bond fell 14.2 basis points to 0.52%, the most significant drop since March last year. The 30-year Treasury bond yield fell 14.2 basis points to 1.829%. Market expectations for interest rate hikes by the Fed and other major central banks have cooled, and traders have postponed the expected time for the Fed to raise interest rates for the first time by 25 basis points from June to September next year. Investors also lowered their expectations for the Bank of England to raise interest rates in December Interest rate futures showed that after the Bank of England's December interest rate meeting, the chance of raising interest rates by 15 basis points fell from 75% the previous day 55%.

- RU: VTB in October increased its net profit under IFRS by 4.1 times, to 22.3 billion rubles. The group's net profit for ten months under IFRS amounted to 279.9 billion rubles, an increase of 4.3 times compared to last year's same period. ROE was 17.3% in 10 months and 12.5% in October. Considering the sale of the stake in Magnit, 320-330 billion rubles are outlined at the end of the year. Consolidated profit and dividend yield at the level of 14%, if VTB, as promised, will send half of it to shareholders in the form of dividends. We consider the likelihood of such an event to be very high. Therefore, we have an up-to-date idea for VTB shares, and the target is RUB 0.0674.

- RU: According to IFRS in July-September this year, the net profit of the company "Rosseti" amounted to 33.5 billion rubles after 27.26 billion in the same period last year. At the same time, EBITDA also increased - from 76.11 to almost 86 billion rubles. Although the investment case here has long been unclear, the dividend yield of Rosseti shares is significantly inferior to the yield of the best subsidiaries.

- CN: Evergrande Automobile announced that it had refunded 2,663,300 square meters of living supporting land and industrial land that has not yet started, involving seven projects with a total of 1.284 billion yuan. The funds will be mainly used for engineering construction, payment of wages for migrant workers, and the payment of remaining land. The land payment, part of the land refund payment, has been confiscated by the government. The group also stated that it had completed the disposal of some assets, including the sale of most of the help of one of its subsidiaries, as well as the relevant shareholders' equity held in Meneco AB; it will also sell Protean Electric Holdings Limited and E-Traction Europe BV to independent third parties. Some shareholders' equity, the transaction will be completed shortly. In addition, Evergrande Automobile stated that to improve overall efficiency and supplement working capital, it has been actively negotiating with potential buyers to sell some healthcare valleys, new energy vehicle life projects, and other assets. In the process of consultation.

- CN: According to information from the Stock Exchange, Xu Jiayin, chairman of China Evergrande, reduced his holdings of 1.2 billion shares of China Evergrande off-market yesterday, at an average price of 2.23 yuan per share, and cashed out 2.676 billion yuan. After completing the transaction, Xu Jiayin's shareholding ratio was reduced from 76.96% to 67.87%.

- GB: Huw Pill, the new chief economist of the Bank of England, said on Friday that the road has been paved, and the central bank will advance its plan to raise interest rates for the first time since the start of the new crown pandemic. However, Peel avoided sending any signals about the possibility of the central bank adjusting borrowing costs at its December meeting. The UK kept its policy unchanged this month, which caught investors off guard. In a speech at the CBI, Peel said, "In my opinion, the way is now paved for policy action." He was an economist at Goldman Sachs. Peel said that the recovery process of the British economy from the pandemic downturn is continuing, and it may be maturing, supply chain issues are causing inflationary pressures, and the labor market is tight. This means that he supports the Bank of England’s signal earlier this month that interest rates will have to be raised in the “coming months.”

 

• LOOKING AHEAD:

Today, investors will receive:

- USD: Pending Home Sales m/m, FOMC Member Williams Speaks, and FOMC Member Bowman Speak.

- EUR: German Prelim CPI m/m, Spanish Flash CPI y/y, and ECB President Lagarde Speak.

- GBP: M4 Money Supply m/m, Mortgage Approvals, and Net Lending to Individuals m/m.

- AUD: RBA Deputy Gov Debelle Speaks, Building Approvals m/m, Current Account, Private Sector Credit m/m, and RBA Deputy Gov Debelle Speaks.

- NZD: Final ANZ Business Confidence.

- JPY: BOJ Gov Kuroda Speaks, Unemployment Rate, and Prelim Industrial Production m/m.

- CAD: Current Account, IPPI m/m, RMPI m/m, BOC Gov Macklem Speaks, and Gov Council Member Schembri Speaks.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- Key US index futures indicated early market declines from -0.9% on the NASDAQ to -2.3% on the Dow Jones. The yield on 10-year Treasuries fell ten basis points to 1.54% on the prospect of a Fed softening in the face of the risks of a new strain of COVID-19.

- The World Health Organization has held an emergency meeting, but response options are limited due to lack of data so far. However, the South African Department of Health has noted a sharp rise in the incidence in recent days, leading to the discovery of a new strain that is likely to be resistant to existing vaccines.

- The new strain has dealt the most severe blow to the shares of the cruise companies Carnival Corp. and Royal Caribbean, which lost more than 10% in morning trading. Shares in the largest banks lost more than 4% on expectations of lower rates and a downturn. Finally, the energy sector may also be among the leaders in the decline.
- In contrast, vaccine paper is in demand. Moderna is up 8%, and Pfizer is up 5%. Also in high demand are shares of the economy "sit at home." In particular, Zoom Video was up 9%.
- The coming days will have to clarify the characteristics of the new strain. If its resistance to vaccines is not confirmed, then investors can breathe a sigh of relief. If existing vaccines prove ineffective, then the Christmas rally runs the risk of becoming a Christmas quarantine.

- The yield on 10-year US Treasuries fell sharply by 12 bp. up to 1.51%. The fall in Treasury yields may be associated with positive macroeconomic statistics on the US economy, as well as a certain risk-off against the backdrop of a worsening global situation with COVID-19
- Moody's upgraded EuroChem's credit rating from Ba2 to Ba1. The rating has a stable outlook. In our view, the yield on Eurochem Eurobonds is slightly below the average risk premium among global Eurobonds rated BB
- S&P affirmed the credit rating of the Chinese developer KWG Group at BB- and revised the outlook to negative. The upcoming issues of the issuer may be of interest to investors who are most inclined to risk since the company has sufficient liquidity to redeem two issues of Eurobonds in 2022
- MegaFon announced results for the third quarter of 2021. The company generally published fairly neutral indicators - a slight increase in revenue with a slight decrease in margins. Debt load remains stable
- Fitch has placed RUSNANO's ratings on Rating Watch Negative. The situation with Rusnano is not yet more precise, and the nearest trigger will be the redemption of the RUSNANO2P1 issue for 4.5 billion rubles, scheduled for December 1.
- Protective currencies are in demand on Friday. Investors worried about new coronavirus strain detected in South Africa
- The forint unexpectedly became the growth leader among the EM currencies the day before. The Central Bank of Hungary immediately raised the rate by 0.4% against the forecast of an increase of 0.1%

 

• STOCK MARKET SECTORS:

- High: Health Care.

- Low: Energy, Financials, Industrials, Real Estate, Consumer Discretionary.

 

• TOP CURRENCY & COMMODITIES MARKET DRIVERS:

- COMMODITIES: Oil prices on Friday showed their most significant intraday decline since April 2020. It can certainly be assumed that such a significant drop indicates how much investors are terrified by the threat of a new strain of Covid-19. However, in our opinion, the dynamics on Friday more clearly reflect the effect of low-liquid trading, reinforced by the technical aspect, when the reduction of long positions leads to the forced closure of other longs, prices fall even more again provokes a forced exit from purchases. Domino effect. Of course, oil was not alone in its fall. Metals in London also fell in price. Futures for cotton, cocoa, sugar, coffee fell in price. Gold prices were originally the beneficiary of investor flight from risky and commodity assets. However, the precious metal also came under selling pressure as it was used as a hedging instrument. Hence, the reduction in long positions in risky assets stimulated a reduction in long positions in gold. The scale of the disaster is as if, due to the new strain, key countries have already resumed lockdowns, as they did in the first half of 2020. Of course, the reaction is overwhelming. But the fear factor is also difficult to predict. The emergence of the delta strain has also raised serious concerns in the markets. However, as time has shown, it is possible to grow with the delta strain in the neighborhood. Will the situation be the same with the new strain? Time will show. OPEC + can say its weighty word next week, and against the background of an increased risk of a reduction in demand growth, a decision may be made to postpone an increase in production by 400 thousand barrels per day, as follows from the current agreements. This is not yet our baseline scenario. But depending on the resolution that will become known at the end of today's WHO meeting, we can adjust our expectations. One way or another, there is reason to expect that oil prices will stabilize and return above $ 80 / bbl. Brent, $ / bar. - 73.58 (-10.51%), WTI, $ / bar. - 69.37 (-11.51%), Urals, $ / bar. - 71.88 (-10.64%), Gold, $ / tr. oz. - 1,797.21 (+ 0.49%), Silver, $ / tr. oz. - 23.16 (-1.76%), Aluminum, $ / t - 2 717.50 (-0.23%), Copper, $ / t - 9,801.50 (+ 1.43%), Nickel, $ / t - 20,667.00 (+ 0.38%).

- CURRENCY: Among the G-10 currencies, representatives of the commodity block (Norwegian krone, Canadian, New Zealand, and Australian dollars) looked the weakest, while the haven currencies - the US dollar, yen, and Swiss franc were in high demand. The euro did not show significant weakness against the dollar, since the single currency is a popular financing currency in carrying trade transactions; in the first moments of a decrease in risk appetite, investors, closing their deals (mainly in the Emerging Markets segment), create just an increased demand for financing currencies. The ruble fell against the dollar to a 7-month low. The weakening of the ruble took place along with other emerging market currencies. “Emotions” and “technical factors” were currently trading in the USDRUB pair since the rate from the range of 70–75 moved to the range of 75–80 rubles per dollar. We cannot exclude the possibility that “emotions” and the technical aspect in the execution of stops may lead quotes to March highs in the region of 78 rubles per unit of the American currency. Still, we consider such a movement to be fundamentally unfounded. We do not rule out that the Bank of Russia (as has happened in the past) against the backdrop of a surge in volatility may suspend currency purchases within the framework of the budget rule. The likelihood of such a step increases if the rate rises above 76.00 soon. Let us emphasize that the regulator does not care about specific exchange rate levels, and the priority is the growth or decline rates. The three-month imputed volatility of the USDRUB rate is now close to the April highs. Suppose the indicator jumps to 16% and exceeds the 2021 maximum set at the beginning of January. In that case, the likelihood of a pause in implementing the budget rule will increase markedly. The market is worried that the newly discovered variant virus will worsen the global epidemic, and funds will flow into the safe-haven Japanese yen and Swiss franc. The yen rebounded against the dollar from an earlier 5-year low, rising nearly 2% to 113.09 yen, the best single-day performance since March last year. The euro rose nearly 1% against the US dollar to $1.1312 but fell to a more than 6-year low against the Swiss franc at 1.0428 Swiss francs. The pound once fell below $1.3278, a record low this year. The dollar index fell 0.75% to 96.03. EUR / USD - 1.1311 (+ 0.95%), GBP / USD - 1.3329 (+ 0.07%), USD / JPY - 113.29 (-1.79%), Dollar Index - 96.05 (-0.75%), USD / RUB - 75.5368 (+ 1.36%), EUR / RUB - 85.469 (+ 2.28%).

 

• CHART OF THE DAY:

The British pound against the U.S. dollar briefly fell below $1.33 on Friday, the first time since December 2020. Scientists have discovered a variant virus known as the most worrying so far, hitting global market sentiment. Subsequently, the pound rose to above $1.33 against the dollar but fell 0.8% against the euro. Fearing that it may be more challenging to use vaccines against this new variant found in South Africa, investors lowered their expectations for the Bank of England’s December interest rate hike, adding downward pressure on the pound. The pound was trading above the US$1.38 in October but has been falling in recent weeks, first because of disappointment that the Bank of England did not raise interest rates this month, and recently due to concerns about the slowdown in economic momentum and the tightening of US monetary policy. Blow. The pound fell to $1.3278 against the U.S. dollar in intraday trading but rebounded to $1.3318 at 1530 GMT, which was flat for the day. The pound fell 0.8% against the euro to 0.8482 pounds, the lowest level since November 16. The news of the new variant dampened investor confidence, and global stock markets fell sharply. Emerging markets or high-risk currencies linked to commodity prices fell sharply. Although the pound fell, it remained relatively resilient.• GBPUSD - D1, Resistance around ~ 1.33624 & 1.36551, Support around ~ 1.30331

 

• GLOBAL CAPITAL MARKETS OVERVIEW: The U.S. stock market only had a half-day market on the day following Thanksgiving. The discovery of a new variant of the virus in South Africa triggered panic selling in the market, and the three major indexes fell by more than 2%. The VIX Volatility Index, commonly known as the Panic Index, surged 54%. The Dow Jones index gap opened more than 400 points lower, fell sharply at 1055 points, hit 34749 points, closed at 34899 points, down 905 points, or 2.53%, the most significant one-day drop since October last year. The Standard & Poor's 500 Index fell 2.5% to a low of 4585 points and finally closed at 4594 points, down 106 points, or 2.27%, the most significant one-day drop since February last year. The Nasdaq index, dominated by technology stocks, closed at 15,491 points, down 353 points, or 2.23%. Aviation and travel-related stocks plummeted, cruise operators, Carnival and Royal Caribbean Cruises fell more than 10%. Delta Air Lines and American Airlines fell more than 8%. Boeing fell by more than half. All of the 11 major S&P sectors, except for the healthcare sector, fell more than 1%. Worried about slowing economic activity and lower investors’ expectations for interest rate hikes in the United States, the S&P Bank Index fell nearly 4%. This year’s best-performing energy stocks fell 4%, the most significant decline in more than eight months due to crude oil futures. The price plummeted. The health care sector lost 0.45%, driven by vaccine manufacturer Pfizer's stock price rose more than 6% and hit a new high, Modena's stock price soared nearly 21%. Over the week, the Dow fell almost 2%, the benchmark index fell more than 2%, and the Nasdaq fell more than 3%. European stock markets closed sharply lower on Friday in a broad sell-off. A new variant virus that may be vaccine-resistant emerged, sparking concerns about a further blow to the global economy and pushing investors to withdraw at higher risk assets. The pan-European STOXX 600 index closed down 3.7%, the worst one-day performance since June last year, and the volatility index of significant stock markets hit the highest in nearly ten months. The STOXX 600 index closed 4.5% lower last week. Little is known about the variant viruses detected in South Africa, Botswana, and Hong Kong. Still, scientists say the variant has an unusual group of mutations that may evade immune responses or make it more transmissible. The French CAC-40 index tumbled 4.8%. The UK's FTSE 100 index closed down 3.6%, Germany's DAX index fell 4.2%, and Spain's IBEX index fell 5.0%. Travel and leisure stocks tumbled 8.8%, their worst single-day performance since March last year. It was also the worst-performing sector last week, dropping 11.6%. The fall in eurozone bond yields put pressure on bank stocks, which fell 6.9%. Oil and gas stocks tumbled 5.8%, miner stocks dropped 5.0%, oil and metal prices plummeted, and reports of new variants intensified concerns about the economic slowdown. The decline in technology stocks was relatively small due to the rise in home stocks. Defensive sectors such as healthcare stocks and utility stocks saw minor declines. The increase in the price of external gold, worries about the new variant of the virus hit risk appetite, and funds flowed into safe-haven assets, which pushed up the price of gold. Spot gold once rose to US$1815.26 per ounce, but the increase narrowed earlier to US$1,791.97 per ounce, an increase of 0.2%. New York gold futures once reached a high of US$1816.3 per ounce, rising nearly 2%, and closing gains narrowed significantly to 0.1%, but for the entire week, they fell by about 3.6%. The discovery of a new virus variant in South Africa has worried the market or restrained economic growth and fuel demand. Crude oil futures prices have plummeted by about 12% or more and have fallen for five consecutive weeks. London Brent oil futures closed at US$72.72 per barrel, down US$9.5, or 11.6%, the most significant one-day drop since April last year, falling more than 8% throughout the week. New York oil futures fell below 70 US dollars per barrel to close at 68.15 US dollars, down 10.24 US dollars, or 11.1% and lost more than 10% last week. Japan's Nikkei Index fell to its lowest level in a month on Friday as a new variant of the new crown virus discovered in South Africa caused concerns. The Chinese government asked China to call News of car giant Didi Chuxing’s delisting from New York also hurt popularity. The Nikkei index fell 2.53% to 28,751.62 points, the lowest closing price since October 25 and the most significant one-day drop in five months. The broader Topix stock index fell 2.01% to a six-week closing low of 1,984.98. The Nikkei Index fell 3.3%, and the Topix Stock Index fell 2.9%, marking its most significant weekly decline since the last week of September. The variant virus discovered in South Africa may evade the immune response, prompting the UK to rush to impose travel restrictions on South Africa. This news hit the travel-related stocks the most, which had benefited from a surge in domestic consumption due to the successful containment of the epidemic. The Topix Air Transport Index fell 5.4% to a seven-month low, while the Topix Land Transport Index, mainly composed of railway operators, fell 2.9% to a one-year low. All Nippon Airways fell 4.5% after the airline raised funds through the sale of convertible bonds, a move that highlighted the difficulties faced by the industry. Keisei Electric Railway fell 6.3% among the railway operators, the worst performance among the Nikkei stocks. Tokai Railway (JR Tokai) fell 3.3%, while West Japan Railway fell 3.2%. SoftBank Group plunged 5.2% after Bloomberg News reported on Friday that Chinese regulators had asked executives of ride-hailing giant Didi Chuxing to formulate a plan to delist from the US Stock Exchange because of concerns about data security. The Japanese conglomerate is a significant investor in U.S.-listed Chinese technology companies, including Didi and Alibaba. The Shanghai Composite Index closed at 3564 points, down 20 points, or 0.56%. The Shenzhen Stock Exchange Component Index closed at 14,777 points, down 50 points, or 0.34%. The ChiNext Index rose nearly 0.8% in the early stage, briefly rose above 3,500 points, and then fell to close at 3468 points, down 5 points, or 0.16%. Last week, Shanghai stocks rose 0.1%, the Shenzhen Stock Exchange component index rose nearly 0.2%, and the ChiNext stock index rose almost 1.5%.   • REVIEWING ECONOMIC DATA: Looking at the last economic data: - US: U.S. Treasury yields hit the most significant drop since the outbreak, and after the emergence of a new variant of the virus in South Africa, funds flowed into safe-haven assets. The 10-year Treasury bond yield fell 16 basis points to near 1.483%, the most significant one-day drop since March last year. The yield on the two-year Treasury bond fell 14.2 basis points to 0.52%, the most significant drop since March last year. The 30-year Treasury bond yield fell 14.2 basis points to 1.829%. Market expectations for interest rate hikes by the Fed and other major central banks have cooled, and traders have postponed the expected time for the Fed to raise interest rates for the first time by 25 basis points from June to September next year. Investors also lowered their expectations for the Bank of England to raise interest rates in December Interest rate futures showed that after the Bank of England's December interest rate meeting, the chance of raising interest rates by 15 basis points fell from 75% the previous day 55%. - RU: VTB in October increased its net profit under IFRS by 4.1 times, to 22.3 billion rubles. The group's net profit for ten months under IFRS amounted to 279.9 billion rubles, an increase of 4.3 times compared to last year's same period. ROE was 17.3% in 10 months and 12.5% in October. Considering the sale of the stake in Magnit, 320-330 billion rubles are outlined at the end of the year. Consolidated profit and dividend yield at the level of 14%, if VTB, as promised, will send half of it to shareholders in the form of dividends. We consider the likelihood of such an event to be very high. Therefore, we have an up-to-date idea for VTB shares, and the target is RUB 0.0674. - RU: According to IFRS in July-September this year, the net profit of the company "Rosseti" amounted to 33.5 billion rubles after 27.26 billion in the same period last year. At the same time, EBITDA also increased - from 76.11 to almost 86 billion rubles. Although the investment case here has long been unclear, the dividend yield of Rosseti shares is significantly inferior to the yield of the best subsidiaries. - CN: Evergrande Automobile announced that it had refunded 2,663,300 square meters of living supporting land and industrial land that has not yet started, involving seven projects with a total of 1.284 billion yuan. The funds will be mainly used for engineering construction, payment of wages for migrant workers, and the payment of remaining land. The land payment, part of the land refund payment, has been confiscated by the government. The group also stated that it had completed the disposal of some assets, including the sale of most of the help of one of its subsidiaries, as well as the relevant shareholders' equity held in Meneco AB; it will also sell Protean Electric Holdings Limited and E-Traction Europe BV to independent third parties. Some shareholders' equity, the transaction will be completed shortly. In addition, Evergrande Automobile stated that to improve overall efficiency and supplement working capital, it has been actively negotiating with potential buyers to sell some healthcare valleys, new energy vehicle life projects, and other assets. In the process of consultation. - CN: According to information from the Stock Exchange, Xu Jiayin, chairman of China Evergrande, reduced his holdings of 1.2 billion shares of China Evergrande off-market yesterday, at an average price of 2.23 yuan per share, and cashed out 2.676 billion yuan. After completing the transaction, Xu Jiayin's shareholding ratio was reduced from 76.96% to 67.87%. - GB: Huw Pill, the new chief economist of the Bank of England, said on Friday that the road has been paved, and the central bank will advance its plan to raise interest rates for the first time since the start of the new crown pandemic. However, Peel avoided sending any signals about the possibility of the central bank adjusting borrowing costs at its December meeting. The UK kept its policy unchanged this month, which caught investors off guard. In a speech at the CBI, Peel said, "In my opinion, the way is now paved for policy action." He was an economist at Goldman Sachs. Peel said that the recovery process of the British economy from the pandemic downturn is continuing, and it may be maturing, supply chain issues are causing inflationary pressures, and the labor market is tight. This means that he supports the Bank of England’s signal earlier this month that interest rates will have to be raised in the “coming months.”   • LOOKING AHEAD: Today, investors will receive: - USD: Pending Home Sales m/m, FOMC Member Williams Speaks, and FOMC Member Bowman Speak. - EUR: German Prelim CPI m/m, Spanish Flash CPI y/y, and ECB President Lagarde Speak. - GBP: M4 Money Supply m/m, Mortgage Approvals, and Net Lending to Individuals m/m. - AUD: RBA Deputy Gov Debelle Speaks, Building Approvals m/m, Current Account, Private Sector Credit m/m, and RBA Deputy Gov Debelle Speaks. - NZD: Final ANZ Business Confidence. - JPY: BOJ Gov Kuroda Speaks, Unemployment Rate, and Prelim Industrial Production m/m. - CAD: Current Account, IPPI m/m, RMPI m/m, BOC Gov Macklem Speaks, and Gov Council Member Schembri Speaks.   • KEY EQUITY & BOND MARKET DRIVERS: - Key US index futures indicated early market declines from -0.9% on the NASDAQ to -2.3% on the Dow Jones. The yield on 10-year Treasuries fell ten basis points to 1.54% on the prospect of a Fed softening in the face of the risks of a new strain of COVID-19. - The World Health Organization has held an emergency meeting, but response options are limited due to lack of data so far. However, the South African Department of Health has noted a sharp rise in the incidence in recent days, leading to the discovery of a new strain that is likely to be resistant to existing vaccines. - The new strain has dealt the most severe blow to the shares of the cruise companies Carnival Corp. and Royal Caribbean, which lost more than 10% in morning trading. Shares in the largest banks lost more than 4% on expectations of lower rates and a downturn. Finally, the energy sector may also be among the leaders in the decline. - In contrast, vaccine paper is in demand. Moderna is up 8%, and Pfizer is up 5%. Also in high demand are shares of the economy "sit at home." In particular, Zoom Video was up 9%. - The coming days will have to clarify the characteristics of the new strain. If its resistance to vaccines is not confirmed, then investors can breathe a sigh of relief. If existing vaccines prove ineffective, then the Christmas rally runs the risk of becoming a Christmas quarantine. - The yield on 10-year US Treasuries fell sharply by 12 bp. up to 1.51%. The fall in Treasury yields may be associated with positive macroeconomic statistics on the US economy, as well as a certain risk-off against the backdrop of a worsening global situation with COVID-19 - Moody's upgraded EuroChem's credit rating from Ba2 to Ba1. The rating has a stable outlook. In our view, the yield on Eurochem Eurobonds is slightly below the average risk premium among global Eurobonds rated BB - S&P affirmed the credit rating of the Chinese developer KWG Group at BB- and revised the outlook to negative. The upcoming issues of the issuer may be of interest to investors who are most inclined to risk since the company has sufficient liquidity to redeem two issues of Eurobonds in 2022 - MegaFon announced results for the third quarter of 2021. The company generally published fairly neutral indicators - a slight increase in revenue with a slight decrease in margins. Debt load remains stable - Fitch has placed RUSNANO's ratings on Rating Watch Negative. The situation with Rusnano is not yet more precise, and the nearest trigger will be the redemption of the RUSNANO2P1 issue for 4.5 billion rubles, scheduled for December 1. - Protective currencies are in demand on Friday. Investors worried about new coronavirus strain detected in South Africa - The forint unexpectedly became the growth leader among the EM currencies the day before. The Central Bank of Hungary immediately raised the rate by 0.4% against the forecast of an increase of 0.1%   • STOCK MARKET SECTORS: - High: Health Care. - Low: Energy, Financials, Industrials, Real Estate, Consumer Discretionary.   • TOP CURRENCY & COMMODITIES MARKET DRIVERS: - COMMODITIES: Oil prices on Friday showed their most significant intraday decline since April 2020. It can certainly be assumed that such a significant drop indicates how much investors are terrified by the threat of a new strain of Covid-19. However, in our opinion, the dynamics on Friday more clearly reflect the effect of low-liquid trading, reinforced by the technical aspect, when the reduction of long positions leads to the forced closure of other longs, prices fall even more again provokes a forced exit from purchases. Domino effect. Of course, oil was not alone in its fall. Metals in London also fell in price. Futures for cotton, cocoa, sugar, coffee fell in price. Gold prices were originally the beneficiary of investor flight from risky and commodity assets. However, the precious metal also came under selling pressure as it was used as a hedging instrument. Hence, the reduction in long positions in risky assets stimulated a reduction in long positions in gold. The scale of the disaster is as if, due to the new strain, key countries have already resumed lockdowns, as they did in the first half of 2020. Of course, the reaction is overwhelming. But the fear factor is also difficult to predict. The emergence of the delta strain has also raised serious concerns in the markets. However, as time has shown, it is possible to grow with the delta strain in the neighborhood. Will the situation be the same with the new strain? Time will show. OPEC + can say its weighty word next week, and against the background of an increased risk of a reduction in demand growth, a decision may be made to postpone an increase in production by 400 thousand barrels per day, as follows from the current agreements. This is not yet our baseline scenario. But depending on the resolution that will become known at the end of today's WHO meeting, we can adjust our expectations. One way or another, there is reason to expect that oil prices will stabilize and return above $ 80 / bbl. Brent, $ / bar. - 73.58 (-10.51%), WTI, $ / bar. - 69.37 (-11.51%), Urals, $ / bar. - 71.88 (-10.64%), Gold, $ / tr. oz. - 1,797.21 (+ 0.49%), Silver, $ / tr. oz. - 23.16 (-1.76%), Aluminum, $ / t - 2 717.50 (-0.23%), Copper, $ / t - 9,801.50 (+ 1.43%), Nickel, $ / t - 20,667.00 (+ 0.38%). - CURRENCY: Among the G-10 currencies, representatives of the commodity block (Norwegian krone, Canadian, New Zealand, and Australian dollars) looked the weakest, while the haven currencies - the US dollar, yen, and Swiss franc were in high demand. The euro did not show significant weakness against the dollar, since the single currency is a popular financing currency in carrying trade transactions; in the first moments of a decrease in risk appetite, investors, closing their deals (mainly in the Emerging Markets segment), create just an increased demand for financing currencies. The ruble fell against the dollar to a 7-month low. The weakening of the ruble took place along with other emerging market currencies. “Emotions” and “technical factors” were currently trading in the USDRUB pair since the rate from the range of 70–75 moved to the range of 75–80 rubles per dollar. We cannot exclude the possibility that “emotions” and the technical aspect in the execution of stops may lead quotes to March highs in the region of 78 rubles per unit of the American currency. Still, we consider such a movement to be fundamentally unfounded. We do not rule out that the Bank of Russia (as has happened in the past) against the backdrop of a surge in volatility may suspend currency purchases within the framework of the budget rule. The likelihood of such a step increases if the rate rises above 76.00 soon. Let us emphasize that the regulator does not care about specific exchange rate levels, and the priority is the growth or decline rates. The three-month imputed volatility of the USDRUB rate is now close to the April highs. Suppose the indicator jumps to 16% and exceeds the 2021 maximum set at the beginning of January. In that case, the likelihood of a pause in implementing the budget rule will increase markedly. The market is worried that the newly discovered variant virus will worsen the global epidemic, and funds will flow into the safe-haven Japanese yen and Swiss franc. The yen rebounded against the dollar from an earlier 5-year low, rising nearly 2% to 113.09 yen, the best single-day performance since March last year. The euro rose nearly 1% against the US dollar to $1.1312 but fell to a more than 6-year low against the Swiss franc at 1.0428 Swiss francs. The pound once fell below $1.3278, a record low this year. The dollar index fell 0.75% to 96.03. EUR / USD - 1.1311 (+ 0.95%), GBP / USD - 1.3329 (+ 0.07%), USD / JPY - 113.29 (-1.79%), Dollar Index - 96.05 (-0.75%), USD / RUB - 75.5368 (+ 1.36%), EUR / RUB - 85.469 (+ 2.28%).   • CHART OF THE DAY: The British pound against the U.S. dollar briefly fell below $1.33 on Friday, the first time since December 2020. Scientists have discovered a variant virus known as the most worrying so far, hitting global market sentiment. Subsequently, the pound rose to above $1.33 against the dollar but fell 0.8% against the euro. Fearing that it may be more challenging to use vaccines against this new variant found in South Africa, investors lowered their expectations for the Bank of England’s December interest rate hike, adding downward pressure on the pound. The pound was trading above the US$1.38 in October but has been falling in recent weeks, first because of disappointment that the Bank of England did not raise interest rates this month, and recently due to concerns about the slowdown in economic momentum and the tightening of US monetary policy. Blow. The pound fell to $1.3278 against the U.S. dollar in intraday trading but rebounded to $1.3318 at 1530 GMT, which was flat for the day. The pound fell 0.8% against the euro to 0.8482 pounds, the lowest level since November 16. The news of the new variant dampened investor confidence, and global stock markets fell sharply. Emerging markets or high-risk currencies linked to commodity prices fell sharply. Although the pound fell, it remained relatively resilient.• GBPUSD - D1, Resistance around ~ 1.33624 & 1.36551, Support around ~ 1.30331