• GLOBAL CAPITAL MARKETS OVERVIEW:

European stock indexes fell on Thursday, reversing the gains of the previous trading day. The Frankfurt DAX 30 index fell 210 points, or 1.4%, to 15,263 points. Other major exchanges closed down 0.6% to 1.8%. After Germany announced the new COVID-19 disease restriction measures, the new OmiCon coronavirus mutation suppressed risk sentiment, including restrictions on the number of people indoors and the closure of some discos and clubs. At the same time, investors weighed the possibility of the Federal Reserve speeding up interest rate hikes. In Europe, economic data showed that producer price inflation in the eurozone hit a record high, which may increase the European Central Bank’s adjustment to its long-standing statement that high inflation is temporary. Pressure. The FTSE MIB fell 1.4% on Thursday to close at 2,6005.4 points. The increase in the previous trading day was more than halved. The pandemic concerns dragged down the entire European stock market, especially the technology sector. After detecting Omicron variant cases in the country and the daily infection rate reaching the highest level since April, the Italian government is considering new restrictions, including the mandatory use of masks outdoors. In terms of data, Italy’s October unemployment rate was 9.4%, slightly higher than the previous month’s 9.2%, while Eurozone producer inflation set a new record. On the company side, STMicroelectronics fell 6.7% after Bloomberg published an article saying that demand for the iPhone has fallen. On the other hand, the share price of Telecom Italia rose 2% after the company wrote to the Ministry of Economic Development stating that the telecom’s fixed-line assets are of great importance to the country, considering KKR 33 billion. When the euro is quoted, it will be valued. The CAC 40 index fell 1.1% on Thursday to close at 6795.75 points, partially offsetting the gains of the previous trading day, as fears about the epidemic dominated technology stocks and travel stocks. The French health authorities announced that the first batch of Omicron variants had been detected in mainland soil during the meeting. The government is considering further restrictions to curb the increase in incidence. Toronto’s main stock index S&P/TSX rebounded above 20,600 on Thursday and closed at 20,465 on Wednesday, a one-and-a-half month low affected by defensive properties such as energy, finance, consumer commodities, and utilities. Stocks boosted. Investors welcomed the lively performance of Canadian banks, Toronto Dominican Bank and Imperial Bank of Canada, which announced higher dividends and stock repurchase plans. So far, this has been a solid profitable season for the Canadian financial industry. Wall Street’s rally accelerated in the last two hours of Thursday’s trading. The Dow Jones Index rose by more than 700 points, led by aviation, casino, and energy stocks. Investors continue to follow the development of the new Omicron coronavirus variant, and the WHO chief scientist suggests that the vaccine may still provide some protection. Boeing shares rose more than 6% after the China Aviation Administration finally cleared the way for the troubled 737MAX aircraft to resume service. At the same time, Apple warned its suppliers that due to weakening demand for the new iPhone, it might not fulfill all orders, and Apple's stock price is under pressure. On Thursday, the Shanghai Composite Index fell 0.09% to close at 3574 points, while the Shenzhen constituent stock index fell 0.19% to close at 14,766 points. The reason was that the mainland stock market was unable to grasp the direction and had little to do with the violent fluctuations of its global counterparts. Due to the uncertainty surrounding the Omicron variant and its economic impact and expectations of interest rate hikes in the United States, the global market is in a state of tension. At the same time, China’s stock market shows clear differences, with blue-chip companies, clean energy companies, and high-end manufacturers supporting the market, while technology and other highly regulated industries lag. Chinese technology companies dragged down the market. Four-dimensional information (down 9.91%), Jiangsu Zhongtian (down 6.23%), Wangsu Technology (down 7.07%), Jiangsu and Bolun (down 3.58%), Shenzhen China Youth Daily (down 9.45%) %), and Col Digital (down 12.17%) and other companies fell sharply. Nikkei 225 index fell 0.65% to close at 27,753 points. In comparison, the broader Topix index fell 0.54% to close at 1926 points due to investor concerns about Omicron variants and the Fed’s hawkish tendencies to remain cautious. The United States is the latest country to report its first case of the new variant. Other countries such as Japan have reported more cases because of the increased uncertainty about the scale of this wave and its economic impact. Federal Reserve Chairman Jerome Powell (Jerome Powell) also doubled down on his hawkish views, saying that policymakers will discuss the early termination of the central bank's stimulus plan while acknowledging that inflation remains high. Highly valued Japanese technology companies fell following their Wall Street counterparts. SoftBank Group (down 5.1%), Laser Technology Corporation (down 1.41%), Currency Group (down 7.87%), Taiyo Yuden (down 3.16%), and M3 Corporation (Down 2.45%) led the decline. Travel-related stocks also fell, with Japan Airlines (down 2.47%), East Japan Railway (down 3.47%), and All Nippon Airways (down 1.74%) falling. The Standard & Poor's/Australian Stock Exchange 200 Index fell again by 0.15% in volatile trading on Thursday to close at 7225 points. Investors remained nervous about Omicron variants and expectations of rising US interest rates. On Thursday, the number of people carrying the newly mutated virus in Australia increased, prompting the state government to strengthen domestic border controls. Health experts awaited further understanding of the dangers caused by the virus. At the same time, the Australian stock market fell slightly, as the sharp decline in technology stocks offset the defensive part of the market's mid-market rebound, led by Afterpay (-6.08%) and Xero (-5.11%). Energy companies and gold and lithium miners also fell. Newcrest Mining Company (down 2.42%), Pilbara Mining Company (down 2.31%), Oro Cobra Limited (down 5.87%), Lion City Resources Corporation (down 16.15%), and Woodside Petroleum Corporation (down 1.86%) both reported significant losses. The NZX 50 index fell 0.42% on Thursday to close at 12670 points. Concerns about Omicron variants made investors nervous. Fed Chairman Jerome Powell's (Jerome Powell)'s tough remarks on expectations of rising US interest rates also suppressed market sentiment. At the same time, the COVID-19 prevention system is preparing to enter a system of life with the COVID-19 virus starting from Friday, despite the emergence of a new variant. So far, the country has not reported any cases of Omicron variants but emphasizes the need for caution at the border. The biggest decliners in the index included Vista (-3.42%), NZX (-2.78%), Skellerup (-2.3%), Ryman Healthcare (-1.96%) and Spark New Zealand (-1.78%).

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- EU: Germany’s seasonally adjusted unemployment rate has fallen from 5.4% in November 2021 to 5.3%, much lower than the 6.2% touched in 2020. The number of unemployed fell by 34,000 to 2.42 million, bringing the total unemployment rate to its lowest level since March 2020. According to reports, Bremen (10.2%) and Berlin (9.2%) have the highest incidence rates, and Bayern (3.1%) and Baden-Wortmburg (3.5%) have the lowest incidence rates.

- EU: The seasonally adjusted unemployment rate in the Eurozone fell to 7.3% in October 2021, the lowest level since April 2020 and in line with market expectations. The unemployed declined by 64,000 to 12.045 million, and the labor market recovered from the epidemic. At the same time, the youth unemployment rate, which measures job seekers under the age of 25, fell from 16.1% last month to 15.9% in October. Among the largest economies in the Eurozone, Spain (14.5%), Italy (9.4%), and France (7.6%) have the highest unemployment rates, while the Netherlands (2.9%) and Germany (3.3%) have the lowest unemployment rates.

- EU: Producer prices in the Eurozone rose by 5.4% from October 2021. This is the largest increase since January 1995. It is far higher than the 3.5% increase expected by the market. This is due to soaring energy prices and supply bottlenecks. And under the influence of fundamental effects. This data, coupled with persistently high consumer price inflation, should increase concerns about the impact of rising prices on the euro zone's recovery and may increase the pressure of the European Central Bank to adjust its long-standing claim that high inflation is temporary. The main upward pressure comes from: energy (16.8% vs. 7.8% in September); intermediate products (1.4% vs. 0.9%); and non-durable consumer goods (0.5% and 0.3%, respectively). On an annual basis, the producer price index rose by 21.9% in October, a record high.

- EU: Italy’s October unemployment rate rose from 9.2% last month to 2021, exceeding market expectations of 9.1%. The number of employed people increased by 35,000 to 23 million, while the inactive population decreased by 79,000 to 13.4 million. The youth unemployment rate, which measures 15-24-year-old job seekers, fell to 28.2% from a downward revision of 29.6% in September.

- US: In the week ending November 27, the number of new applications for unemployment benefits in the United States rose from 194,000 in the previous period to 222,000, which was lower than the market's expectations of 240,000. Nevertheless, the number of new applicants is close to an average of approximately 220,000 per week before the 2019 influenza pandemic, reflecting the continued recovery of the US labor market. The claimed 4-week moving average (eliminating week-to-week volatility) fell to 23,875 000, a new pandemic low. After non-seasonal adjustments, the number of people claiming unemployment benefits for the first time fell by 42,000 to 121,000, of which Virginia (a decrease of 91,000), Texas (a reduction of 60,000), and California (A decrease of 46,000 people). The number of people claiming unemployment benefits for the first time has dropped significantly.

- US: The number of layoffs announced by U.S. companies dropped by 34.8% from a month ago and from 77% in the same period last year to 14,875 in November 2021. This is the lowest total monthly income since May 1993 as the company tries to gain a foothold in the labor market. Retain employees under stressful conditions. Companies in the technology sector announced the most layoffs (1980), followed by the service sector (1835), the healthcare/product sector (1817), and the real estate sector (1677). So far this year, employers have announced plans to cut 302,918 jobs, which is 86% less than the 2227725 jobs in the same period last year. This is the lowest total from January to November on record.

- JP: In November 2021, Japan's consumer confidence index was 39.2, the same as the previous month. Nonetheless, the data is the most vital reading since May 2019. As the main sub-index of income growth (up 0.3 points to 39.4), employment perceptions (up 1.9 points to 42.9) have improved due to CVID-19 Restrictions and soaring vaccinations. However, at the same time, the sub-indices of overall livelihoods (down 1.0 point to 38.1) and willingness to buy durable goods (down 1.2 points 36.5) deteriorated.

- JP: Board member Hitoshi Suzuki said in a speech that the Bank of Japan will continue to weigh the positive effects carefully and side effects of monetary easing to review whether there is room for further improvement in its monetary policy behavior. He added that policymakers must continue to pay attention to the possibility of increased credit costs due to the delayed economic recovery at home and abroad. "In addition, downward pressure on the core profitability of financial institutions may continue even after the decline in CVID-19, reflecting the long-term low-interest-rate environment and structural factors." In terms of Japan’s economic outlook, Suzuki pointed out that, at present, due to Being vigilant against the coronavirus in service consumption and the impact of supply-side restrictions on exports and production, downward pressure may still exist.

- NZ: New Zealand's terms of trade for goods (goods) increased by 3.3% quarter-on-quarter, reaching the highest level in history in the three months ending June 2021. The previous period increased by 0.1%, while the market expected an increase of 2.5%. Affected by the cost of dairy products, export prices rose by 8.3%, while import prices rose by 4.8%.

 

• LOOKING AHEAD:

Today, investors will receive:

- USD: Challenger Job Cuts y/y, Unemployment Claims, FOMC Member Bostic Speaks, Treasury Sec Yellen Speaks, Natural Gas Storage, FOMC Member Quarles Speaks, FOMC Member Barkin Speaks, FOMC Member Bostic Speaks, and FOMC Member Daly Speaks.

- EUR: Spanish Unemployment Change, Italian Monthly Unemployment Rate, Spanish 10-y Bond Auction, PPI m/m, Unemployment Rate, and French 10-y Bond Auction.

- JPY: Monetary Base y/y, 10-y Bond Auction, and Consumer Confidence.

- AUD: Trade Balance, Retail Sales m/m, and AIG Construction Index.

- CHF: Retail Sales y/y.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- The yield on French 10-year oats fell to -0.02%, the lowest in 12 weeks, as concerns about the spread of the Omega variant triggered a rebound in bonds across Europe. France has found the first two cases of Omicron mutations, and the average incidence of coronavirus for seven days a day is the highest since April. The pandemic panic and expectations of a slower economic recovery have led investors to believe that the European Central Bank can postpone monetary policy tightening and extend the stimulus plan, despite the increase in inflation in November and the Fed’s hawkish stance.

- In early December, Italy's 10-year BTP yield fell to 0.96%, the lowest in a week, consistent with other European debt instruments, because the ongoing pandemic scare weakened investors' risk appetite. The wave of infections continues to rise across Europe, and various tests of Omicron variants have prompted health authorities and the government to discuss further restrictions. Pessimism towards different infections and economic recovery has led money market participants to believe that the European Central Bank’s deposit interest rate will no longer rise in 2022, despite the increase in eurozone inflation in November.

- Australia's 10-year government bond yield fell below 1.70%, the highest level since October 16. Concern about the omicron coronavirus variant discovered in South Africa triggered the global bond rebound. This new strain carries several mutations that may reduce the vaccine's effectiveness, and it has now appeared in several countries, including Australia. As a result, Australian Prime Minister Scott Morrison said Australia would postpone its borders to reopen skilled workers and international students for two weeks, and several Australian states are implementing interstate travel restrictions. In addition, analysts expect the Reserve Bank of Australia to keep monetary policy unchanged and emphasize in its next interest rate decision later this month that it will not raise interest rates until 2023.

- Germany's benchmark bond yield hovered at -0.34%, the lowest level in the past 12 weeks, as concerns about the spread of the Omicron coronavirus variant exceeded the Fed’s expectations for faster downscaling. Federal Reserve Chairman Jerome Powell (Jerome Powell) said that the central bank might discuss speeding up its withdrawal from large-scale bond purchases at its next meeting, and inflationary pressures may continue until mid-2022. In Europe, money market participants no longer expect the European Central Bank to raise interest rates on deposits in 2022, even though the Eurozone inflation rate rose to near the highest level in history in November.

- Japanese investors are net sellers of foreign bonds because the rising risks surrounding Omicron variants have caused the yen to skyrocket, making foreign-owned bonds less attractive. Japanese institutions have also reduced their foreign bond holdings to seek higher yields and reduce the mismatch of assets and liabilities. In the week ending November 27, Japanese investors sold 1343.2 billion yen worth of foreign bonds, a sharp acceleration from the previous week’s net sales of 6.8 billion yen.

- Australia's 10-year government bond yield drops to a six-week low of 1.627%

- Apple (AAPL) shares fell 2%: according to Bloomberg News, the company informed its suppliers of declining demand for its flagship product iPhone;

- Snowflake (SNOW) shares up 10% after solid quarterly report and full-year solid outlook;
- Dollar General (DG) shares lost 3% after the weak forecast for 4Q profit;
- Expeditors International (EXPD) shares declined 4%, a record since March 2020, with Morgan Stanley downgraded to below market and gave a rather negative comment on the overall outlook for the US trucking industry. The bank also downgraded another company in the sector, US Xpress, to equal weight;
- Krispy Kreme (DNUT) shares rose 6%: the company's largest shareholder, JAB Holdings, which owns 44.8% of its shares, said it plans to remain an anchor investor for “many more years”;
- Novavax (NVAX) added 5% after the company announced that it is developing a vaccine design aimed directly at the omicron and is also evaluating the effectiveness of an existing one;
- ON24 (ONFT) shares rose 8% after approving a buyback program of up to $ 50 million in the next 18 months;
- Boeing (BA) and its supplier Spirit AeroSystems (SPR) rose 4% and 6.5%, respectively, on news that China's regulator has re-approved the 737 Max.

 

• STOCK MARKET SECTORS:

- High: Energy, Financials, Industrials, Real Estate, Materials.

- Low: Health Care.

 

• TOP CURRENCY & COMMODITIES MARKET DRIVERS:

- CAD: The Canadian dollar traded near 1.282, close to the 10-month low of 1.2849 hit on February 1. The market weighed the risks of the Omicron variant with the hawkish remarks of Fed Chairman Jerome Powell. At the same time, a round of negative risk sentiment helped to weaken the loonie. After Powell reiterated on Wednesday that policymakers would discuss the early termination of the central bank’s bond-purchase plan at the next meeting, investors bet that the United States would raise interest rates as soon as possible. However, he also emphasized that we need to be prepared to deal with the possibility that inflation may not subside in the second half of next year as currently expected. In addition, the price of oil, Canada’s main export commodity, has also fallen below US$66 per barrel. At the same time, economic data shows that the manufacturing industry is still expanding at a steady rate despite the supply bottleneck, thus buffering further losses. The Canadian manufacturing PMI fell from 57.7 last month to 57.2 in November, much higher than 50.

- RUB: The Russian ruble against the U.S. dollar strengthened to more than 74 marks. The data showed that the domestic inflation rate soared to 8.38% at the end of November, close to the 6-year peak and well above the 4% target. The Bank of Russia is expected to hold its next board meeting on December 17 to raise interest rates by 100 basis points. Despite this, the ruble is still more than 6.5% lower than the 16-month high of 69.3 rubles hit on October 26. The West fears that Russia may conduct a military intervention in Ukraine and drop oil prices. Brent crude oil is Russia’s primary export global benchmark crude oil. Its price is hovering at around US$70 per barrel, which is more than 18% lower than the 3-year high above US$86 at the end of October.

- RMB: On Thursday, the offshore renminbi-dollar exchange rate fell from a six-month high to 6.3700, and lower-than-expected official guidance prompted traders to cut long positions. The People’s Bank of China has set the RMB exchange rate midpoint at 6.3719 per US dollar, which is 23 basis points lower than the previously selected 6.3693. This indicates that the authorities may be uncomfortable with the renminbi's appreciation, as the renminbi has risen to the highest level this year in domestic and overseas markets. Level. Foreign exchange traders also pointed out that although companies have strong demand for local currencies for various payment methods, some of their corporate clients use cheaper U.S. dollars to buy U.S. dollars in early trading. Analysts believe that because the authorities are expected to curb the renminbi's appreciation through indirect measures such as increasing the foreign exchange reserve ratio and curbing currency speculation, the room for the renminbi's appreciation is limited.

- AUD: On Thursday, the Australian dollar exchange rate against the US dollar remained at a nearly one-year low near 0.7100. The Australian dollar is still under pressure under the hawkish tendencies of the Fed. Fed Chairman Jerome Powell (Jerome Powell) reiterated on Wednesday that U.S. policymakers would discuss early termination of the central bank's stimulus plan at the next meeting and acknowledged that inflation might not fall back in the second half of next year as most forecasters currently expect. The Omicron variant also increases downward pressure on the currency because it brings economic risks and supports the Reserve Bank of Australia’s stance of maintaining the loose monetary policy. In the latest meeting minutes, the central bank reiterated that it is prepared to remain patient until the wage and inflation targets are achieved and that raising interest rates in 2024 remains its core issue.

- USD: The US dollar index stabilized at around 96 points on Thursday. After extreme volatility in the past four trading days, the market weighed the risks of the Omicron variant with the hawkish comments of Federal Reserve Chairman Jerome Powell. On Wednesday, the Fed chairman reiterated in Congress that policymakers would discuss the early termination of the central bank’s bond-purchase plan at the next meeting. He also emphasized the need to be prepared to deal with the possibility that inflation may not fall back in the second half of next year as most forecasters currently expect. At the same time, uncertainty surrounding the new variants and their economic impact continue to weigh on the US dollar, as the United States is the latest country to report its first Omicron case.

- AUD: In October 2021, due to weak foreign demand and supply chain disruption, Australia's exports of goods and services fell 3% month-on-month to a five-month low of A$43.05 billion. Sales of non-rural goods fell 7% to A$30.77 billion, dragged down by metal ores and minerals (-23%); machinery (down 9%), other manufactured goods (-4%), and other non-rural goods Manufactured products, including sugar and beverages (-11%). In addition, due to tourism (-14%) and other services (-1%), service industry sales fell by 6% to A$4.64 billion. In contrast, rural commodity shipments increased by 3% to 5.3 billion Australian dollars, boosted by cereals and cereal preparations (22%) and wool and sheepskins (9%). At the same time, non-monetary gold shipments increased by 59% to 2.3 billion Australian dollars, and net merchandise exports increased by 29% to 44 million Australian dollars.

- AUD: In October 2021, Australia’s imports of goods and services fell by 3% month-on-month to a six-month low of A$31.83 billion, as long-term lockdown measures to curb rising delta tensions in several vital states weakened Domestic demand. Arrivals of intermediate products and other commodities fell by 1% to 11.71 billion Australian dollars, affected by processing industrial supplies (net exports-4%) and other capital goods parts (net exports-6%). In addition, capital goods imports fell by 8% to A$6.65 billion, dragged down by net capital goods exports (down 37%); consumer goods fell 1% to A$8.65 billion, and household appliances (down 19%) led the decline. In addition, the number of service arrivals fell by 2% to A$4.47 billion, mainly due to transportation (-1%) and other services (-3%).

 

• CHART OF THE DAY:

On Thursday, the exchange rate of the New Zealand dollar against the US dollar hovered at a one-year low near 0.6810. The New Zealand dollar fell in the previous trading day under the hawkish tendencies of the Federal Reserve. On Wednesday, Fed Chairman Jerome Powell reiterated that U.S. policymakers would discuss early termination of the central bank's stimulus plan at the next meeting and acknowledged that inflation might not fall back in the second half of next year as most forecasters currently expect. At the same time, the Reserve Bank of New Zealand raised the official cash rate by 25 basis points to 0.75% at the last meeting, which was in line with expectations, but did not meet market expectations for a more aggressive 50 basis point rate hike. , Analysts believe that this will support the euro more. RBNZ chief economist Young-Ha also said recently that due to the new coronavirus protection framework, the latest variant of Omicron is unlikely to change the central bank's interest rate hike plan.• NZDUSD - D1, Resistance around ~ 0.72918 & 0.78095, Support around ~ 0.67839 & 0.65158.

 

Omicron concerns tempered, investors go bargain hunting

• GLOBAL CAPITAL MARKETS OVERVIEW:

European stock indexes fell on Thursday, reversing the gains of the previous trading day. The Frankfurt DAX 30 index fell 210 points, or 1.4%, to 15,263 points. Other major exchanges closed down 0.6% to 1.8%. After Germany announced the new COVID-19 disease restriction measures, the new OmiCon coronavirus mutation suppressed risk sentiment, including restrictions on the number of people indoors and the closure of some discos and clubs. At the same time, investors weighed the possibility of the Federal Reserve speeding up interest rate hikes. In Europe, economic data showed that producer price inflation in the eurozone hit a record high, which may increase the European Central Bank’s adjustment to its long-standing statement that high inflation is temporary. Pressure. The FTSE MIB fell 1.4% on Thursday to close at 2,6005.4 points. The increase in the previous trading day was more than halved. The pandemic concerns dragged down the entire European stock market, especially the technology sector. After detecting Omicron variant cases in the country and the daily infection rate reaching the highest level since April, the Italian government is considering new restrictions, including the mandatory use of masks outdoors. In terms of data, Italy’s October unemployment rate was 9.4%, slightly higher than the previous month’s 9.2%, while Eurozone producer inflation set a new record. On the company side, STMicroelectronics fell 6.7% after Bloomberg published an article saying that demand for the iPhone has fallen. On the other hand, the share price of Telecom Italia rose 2% after the company wrote to the Ministry of Economic Development stating that the telecom’s fixed-line assets are of great importance to the country, considering KKR 33 billion. When the euro is quoted, it will be valued. The CAC 40 index fell 1.1% on Thursday to close at 6795.75 points, partially offsetting the gains of the previous trading day, as fears about the epidemic dominated technology stocks and travel stocks. The French health authorities announced that the first batch of Omicron variants had been detected in mainland soil during the meeting. The government is considering further restrictions to curb the increase in incidence. Toronto’s main stock index S&P/TSX rebounded above 20,600 on Thursday and closed at 20,465 on Wednesday, a one-and-a-half month low affected by defensive properties such as energy, finance, consumer commodities, and utilities. Stocks boosted. Investors welcomed the lively performance of Canadian banks, Toronto Dominican Bank and Imperial Bank of Canada, which announced higher dividends and stock repurchase plans. So far, this has been a solid profitable season for the Canadian financial industry. Wall Street’s rally accelerated in the last two hours of Thursday’s trading. The Dow Jones Index rose by more than 700 points, led by aviation, casino, and energy stocks. Investors continue to follow the development of the new Omicron coronavirus variant, and the WHO chief scientist suggests that the vaccine may still provide some protection. Boeing shares rose more than 6% after the China Aviation Administration finally cleared the way for the troubled 737MAX aircraft to resume service. At the same time, Apple warned its suppliers that due to weakening demand for the new iPhone, it might not fulfill all orders, and Apple's stock price is under pressure. On Thursday, the Shanghai Composite Index fell 0.09% to close at 3574 points, while the Shenzhen constituent stock index fell 0.19% to close at 14,766 points. The reason was that the mainland stock market was unable to grasp the direction and had little to do with the violent fluctuations of its global counterparts. Due to the uncertainty surrounding the Omicron variant and its economic impact and expectations of interest rate hikes in the United States, the global market is in a state of tension. At the same time, China’s stock market shows clear differences, with blue-chip companies, clean energy companies, and high-end manufacturers supporting the market, while technology and other highly regulated industries lag. Chinese technology companies dragged down the market. Four-dimensional information (down 9.91%), Jiangsu Zhongtian (down 6.23%), Wangsu Technology (down 7.07%), Jiangsu and Bolun (down 3.58%), Shenzhen China Youth Daily (down 9.45%) %), and Col Digital (down 12.17%) and other companies fell sharply. Nikkei 225 index fell 0.65% to close at 27,753 points. In comparison, the broader Topix index fell 0.54% to close at 1926 points due to investor concerns about Omicron variants and the Fed’s hawkish tendencies to remain cautious. The United States is the latest country to report its first case of the new variant. Other countries such as Japan have reported more cases because of the increased uncertainty about the scale of this wave and its economic impact. Federal Reserve Chairman Jerome Powell (Jerome Powell) also doubled down on his hawkish views, saying that policymakers will discuss the early termination of the central bank's stimulus plan while acknowledging that inflation remains high. Highly valued Japanese technology companies fell following their Wall Street counterparts. SoftBank Group (down 5.1%), Laser Technology Corporation (down 1.41%), Currency Group (down 7.87%), Taiyo Yuden (down 3.16%), and M3 Corporation (Down 2.45%) led the decline. Travel-related stocks also fell, with Japan Airlines (down 2.47%), East Japan Railway (down 3.47%), and All Nippon Airways (down 1.74%) falling. The Standard & Poor's/Australian Stock Exchange 200 Index fell again by 0.15% in volatile trading on Thursday to close at 7225 points. Investors remained nervous about Omicron variants and expectations of rising US interest rates. On Thursday, the number of people carrying the newly mutated virus in Australia increased, prompting the state government to strengthen domestic border controls. Health experts awaited further understanding of the dangers caused by the virus. At the same time, the Australian stock market fell slightly, as the sharp decline in technology stocks offset the defensive part of the market's mid-market rebound, led by Afterpay (-6.08%) and Xero (-5.11%). Energy companies and gold and lithium miners also fell. Newcrest Mining Company (down 2.42%), Pilbara Mining Company (down 2.31%), Oro Cobra Limited (down 5.87%), Lion City Resources Corporation (down 16.15%), and Woodside Petroleum Corporation (down 1.86%) both reported significant losses. The NZX 50 index fell 0.42% on Thursday to close at 12670 points. Concerns about Omicron variants made investors nervous. Fed Chairman Jerome Powell's (Jerome Powell)'s tough remarks on expectations of rising US interest rates also suppressed market sentiment. At the same time, the COVID-19 prevention system is preparing to enter a system of life with the COVID-19 virus starting from Friday, despite the emergence of a new variant. So far, the country has not reported any cases of Omicron variants but emphasizes the need for caution at the border. The biggest decliners in the index included Vista (-3.42%), NZX (-2.78%), Skellerup (-2.3%), Ryman Healthcare (-1.96%) and Spark New Zealand (-1.78%).

 

• REVIEWING ECONOMIC DATA:

Looking at the last economic data:

- EU: Germany’s seasonally adjusted unemployment rate has fallen from 5.4% in November 2021 to 5.3%, much lower than the 6.2% touched in 2020. The number of unemployed fell by 34,000 to 2.42 million, bringing the total unemployment rate to its lowest level since March 2020. According to reports, Bremen (10.2%) and Berlin (9.2%) have the highest incidence rates, and Bayern (3.1%) and Baden-Wortmburg (3.5%) have the lowest incidence rates.

- EU: The seasonally adjusted unemployment rate in the Eurozone fell to 7.3% in October 2021, the lowest level since April 2020 and in line with market expectations. The unemployed declined by 64,000 to 12.045 million, and the labor market recovered from the epidemic. At the same time, the youth unemployment rate, which measures job seekers under the age of 25, fell from 16.1% last month to 15.9% in October. Among the largest economies in the Eurozone, Spain (14.5%), Italy (9.4%), and France (7.6%) have the highest unemployment rates, while the Netherlands (2.9%) and Germany (3.3%) have the lowest unemployment rates.

- EU: Producer prices in the Eurozone rose by 5.4% from October 2021. This is the largest increase since January 1995. It is far higher than the 3.5% increase expected by the market. This is due to soaring energy prices and supply bottlenecks. And under the influence of fundamental effects. This data, coupled with persistently high consumer price inflation, should increase concerns about the impact of rising prices on the euro zone's recovery and may increase the pressure of the European Central Bank to adjust its long-standing claim that high inflation is temporary. The main upward pressure comes from: energy (16.8% vs. 7.8% in September); intermediate products (1.4% vs. 0.9%); and non-durable consumer goods (0.5% and 0.3%, respectively). On an annual basis, the producer price index rose by 21.9% in October, a record high.

- EU: Italy’s October unemployment rate rose from 9.2% last month to 2021, exceeding market expectations of 9.1%. The number of employed people increased by 35,000 to 23 million, while the inactive population decreased by 79,000 to 13.4 million. The youth unemployment rate, which measures 15-24-year-old job seekers, fell to 28.2% from a downward revision of 29.6% in September.

- US: In the week ending November 27, the number of new applications for unemployment benefits in the United States rose from 194,000 in the previous period to 222,000, which was lower than the market's expectations of 240,000. Nevertheless, the number of new applicants is close to an average of approximately 220,000 per week before the 2019 influenza pandemic, reflecting the continued recovery of the US labor market. The claimed 4-week moving average (eliminating week-to-week volatility) fell to 23,875 000, a new pandemic low. After non-seasonal adjustments, the number of people claiming unemployment benefits for the first time fell by 42,000 to 121,000, of which Virginia (a decrease of 91,000), Texas (a reduction of 60,000), and California (A decrease of 46,000 people). The number of people claiming unemployment benefits for the first time has dropped significantly.

- US: The number of layoffs announced by U.S. companies dropped by 34.8% from a month ago and from 77% in the same period last year to 14,875 in November 2021. This is the lowest total monthly income since May 1993 as the company tries to gain a foothold in the labor market. Retain employees under stressful conditions. Companies in the technology sector announced the most layoffs (1980), followed by the service sector (1835), the healthcare/product sector (1817), and the real estate sector (1677). So far this year, employers have announced plans to cut 302,918 jobs, which is 86% less than the 2227725 jobs in the same period last year. This is the lowest total from January to November on record.

- JP: In November 2021, Japan's consumer confidence index was 39.2, the same as the previous month. Nonetheless, the data is the most vital reading since May 2019. As the main sub-index of income growth (up 0.3 points to 39.4), employment perceptions (up 1.9 points to 42.9) have improved due to CVID-19 Restrictions and soaring vaccinations. However, at the same time, the sub-indices of overall livelihoods (down 1.0 point to 38.1) and willingness to buy durable goods (down 1.2 points 36.5) deteriorated.

- JP: Board member Hitoshi Suzuki said in a speech that the Bank of Japan will continue to weigh the positive effects carefully and side effects of monetary easing to review whether there is room for further improvement in its monetary policy behavior. He added that policymakers must continue to pay attention to the possibility of increased credit costs due to the delayed economic recovery at home and abroad. "In addition, downward pressure on the core profitability of financial institutions may continue even after the decline in CVID-19, reflecting the long-term low-interest-rate environment and structural factors." In terms of Japan’s economic outlook, Suzuki pointed out that, at present, due to Being vigilant against the coronavirus in service consumption and the impact of supply-side restrictions on exports and production, downward pressure may still exist.

- NZ: New Zealand's terms of trade for goods (goods) increased by 3.3% quarter-on-quarter, reaching the highest level in history in the three months ending June 2021. The previous period increased by 0.1%, while the market expected an increase of 2.5%. Affected by the cost of dairy products, export prices rose by 8.3%, while import prices rose by 4.8%.

 

• LOOKING AHEAD:

Today, investors will receive:

- USD: Challenger Job Cuts y/y, Unemployment Claims, FOMC Member Bostic Speaks, Treasury Sec Yellen Speaks, Natural Gas Storage, FOMC Member Quarles Speaks, FOMC Member Barkin Speaks, FOMC Member Bostic Speaks, and FOMC Member Daly Speaks.

- EUR: Spanish Unemployment Change, Italian Monthly Unemployment Rate, Spanish 10-y Bond Auction, PPI m/m, Unemployment Rate, and French 10-y Bond Auction.

- JPY: Monetary Base y/y, 10-y Bond Auction, and Consumer Confidence.

- AUD: Trade Balance, Retail Sales m/m, and AIG Construction Index.

- CHF: Retail Sales y/y.

 

• KEY EQUITY & BOND MARKET DRIVERS:

- The yield on French 10-year oats fell to -0.02%, the lowest in 12 weeks, as concerns about the spread of the Omega variant triggered a rebound in bonds across Europe. France has found the first two cases of Omicron mutations, and the average incidence of coronavirus for seven days a day is the highest since April. The pandemic panic and expectations of a slower economic recovery have led investors to believe that the European Central Bank can postpone monetary policy tightening and extend the stimulus plan, despite the increase in inflation in November and the Fed’s hawkish stance.

- In early December, Italy's 10-year BTP yield fell to 0.96%, the lowest in a week, consistent with other European debt instruments, because the ongoing pandemic scare weakened investors' risk appetite. The wave of infections continues to rise across Europe, and various tests of Omicron variants have prompted health authorities and the government to discuss further restrictions. Pessimism towards different infections and economic recovery has led money market participants to believe that the European Central Bank’s deposit interest rate will no longer rise in 2022, despite the increase in eurozone inflation in November.

- Australia's 10-year government bond yield fell below 1.70%, the highest level since October 16. Concern about the omicron coronavirus variant discovered in South Africa triggered the global bond rebound. This new strain carries several mutations that may reduce the vaccine's effectiveness, and it has now appeared in several countries, including Australia. As a result, Australian Prime Minister Scott Morrison said Australia would postpone its borders to reopen skilled workers and international students for two weeks, and several Australian states are implementing interstate travel restrictions. In addition, analysts expect the Reserve Bank of Australia to keep monetary policy unchanged and emphasize in its next interest rate decision later this month that it will not raise interest rates until 2023.

- Germany's benchmark bond yield hovered at -0.34%, the lowest level in the past 12 weeks, as concerns about the spread of the Omicron coronavirus variant exceeded the Fed’s expectations for faster downscaling. Federal Reserve Chairman Jerome Powell (Jerome Powell) said that the central bank might discuss speeding up its withdrawal from large-scale bond purchases at its next meeting, and inflationary pressures may continue until mid-2022. In Europe, money market participants no longer expect the European Central Bank to raise interest rates on deposits in 2022, even though the Eurozone inflation rate rose to near the highest level in history in November.

- Japanese investors are net sellers of foreign bonds because the rising risks surrounding Omicron variants have caused the yen to skyrocket, making foreign-owned bonds less attractive. Japanese institutions have also reduced their foreign bond holdings to seek higher yields and reduce the mismatch of assets and liabilities. In the week ending November 27, Japanese investors sold 1343.2 billion yen worth of foreign bonds, a sharp acceleration from the previous week’s net sales of 6.8 billion yen.

- Australia's 10-year government bond yield drops to a six-week low of 1.627%

- Apple (AAPL) shares fell 2%: according to Bloomberg News, the company informed its suppliers of declining demand for its flagship product iPhone;

- Snowflake (SNOW) shares up 10% after solid quarterly report and full-year solid outlook;
- Dollar General (DG) shares lost 3% after the weak forecast for 4Q profit;
- Expeditors International (EXPD) shares declined 4%, a record since March 2020, with Morgan Stanley downgraded to below market and gave a rather negative comment on the overall outlook for the US trucking industry. The bank also downgraded another company in the sector, US Xpress, to equal weight;
- Krispy Kreme (DNUT) shares rose 6%: the company's largest shareholder, JAB Holdings, which owns 44.8% of its shares, said it plans to remain an anchor investor for “many more years”;
- Novavax (NVAX) added 5% after the company announced that it is developing a vaccine design aimed directly at the omicron and is also evaluating the effectiveness of an existing one;
- ON24 (ONFT) shares rose 8% after approving a buyback program of up to $ 50 million in the next 18 months;
- Boeing (BA) and its supplier Spirit AeroSystems (SPR) rose 4% and 6.5%, respectively, on news that China's regulator has re-approved the 737 Max.

 

• STOCK MARKET SECTORS:

- High: Energy, Financials, Industrials, Real Estate, Materials.

- Low: Health Care.

 

• TOP CURRENCY & COMMODITIES MARKET DRIVERS:

- CAD: The Canadian dollar traded near 1.282, close to the 10-month low of 1.2849 hit on February 1. The market weighed the risks of the Omicron variant with the hawkish remarks of Fed Chairman Jerome Powell. At the same time, a round of negative risk sentiment helped to weaken the loonie. After Powell reiterated on Wednesday that policymakers would discuss the early termination of the central bank’s bond-purchase plan at the next meeting, investors bet that the United States would raise interest rates as soon as possible. However, he also emphasized that we need to be prepared to deal with the possibility that inflation may not subside in the second half of next year as currently expected. In addition, the price of oil, Canada’s main export commodity, has also fallen below US$66 per barrel. At the same time, economic data shows that the manufacturing industry is still expanding at a steady rate despite the supply bottleneck, thus buffering further losses. The Canadian manufacturing PMI fell from 57.7 last month to 57.2 in November, much higher than 50.

- RUB: The Russian ruble against the U.S. dollar strengthened to more than 74 marks. The data showed that the domestic inflation rate soared to 8.38% at the end of November, close to the 6-year peak and well above the 4% target. The Bank of Russia is expected to hold its next board meeting on December 17 to raise interest rates by 100 basis points. Despite this, the ruble is still more than 6.5% lower than the 16-month high of 69.3 rubles hit on October 26. The West fears that Russia may conduct a military intervention in Ukraine and drop oil prices. Brent crude oil is Russia’s primary export global benchmark crude oil. Its price is hovering at around US$70 per barrel, which is more than 18% lower than the 3-year high above US$86 at the end of October.

- RMB: On Thursday, the offshore renminbi-dollar exchange rate fell from a six-month high to 6.3700, and lower-than-expected official guidance prompted traders to cut long positions. The People’s Bank of China has set the RMB exchange rate midpoint at 6.3719 per US dollar, which is 23 basis points lower than the previously selected 6.3693. This indicates that the authorities may be uncomfortable with the renminbi's appreciation, as the renminbi has risen to the highest level this year in domestic and overseas markets. Level. Foreign exchange traders also pointed out that although companies have strong demand for local currencies for various payment methods, some of their corporate clients use cheaper U.S. dollars to buy U.S. dollars in early trading. Analysts believe that because the authorities are expected to curb the renminbi's appreciation through indirect measures such as increasing the foreign exchange reserve ratio and curbing currency speculation, the room for the renminbi's appreciation is limited.

- AUD: On Thursday, the Australian dollar exchange rate against the US dollar remained at a nearly one-year low near 0.7100. The Australian dollar is still under pressure under the hawkish tendencies of the Fed. Fed Chairman Jerome Powell (Jerome Powell) reiterated on Wednesday that U.S. policymakers would discuss early termination of the central bank's stimulus plan at the next meeting and acknowledged that inflation might not fall back in the second half of next year as most forecasters currently expect. The Omicron variant also increases downward pressure on the currency because it brings economic risks and supports the Reserve Bank of Australia’s stance of maintaining the loose monetary policy. In the latest meeting minutes, the central bank reiterated that it is prepared to remain patient until the wage and inflation targets are achieved and that raising interest rates in 2024 remains its core issue.

- USD: The US dollar index stabilized at around 96 points on Thursday. After extreme volatility in the past four trading days, the market weighed the risks of the Omicron variant with the hawkish comments of Federal Reserve Chairman Jerome Powell. On Wednesday, the Fed chairman reiterated in Congress that policymakers would discuss the early termination of the central bank’s bond-purchase plan at the next meeting. He also emphasized the need to be prepared to deal with the possibility that inflation may not fall back in the second half of next year as most forecasters currently expect. At the same time, uncertainty surrounding the new variants and their economic impact continue to weigh on the US dollar, as the United States is the latest country to report its first Omicron case.

- AUD: In October 2021, due to weak foreign demand and supply chain disruption, Australia's exports of goods and services fell 3% month-on-month to a five-month low of A$43.05 billion. Sales of non-rural goods fell 7% to A$30.77 billion, dragged down by metal ores and minerals (-23%); machinery (down 9%), other manufactured goods (-4%), and other non-rural goods Manufactured products, including sugar and beverages (-11%). In addition, due to tourism (-14%) and other services (-1%), service industry sales fell by 6% to A$4.64 billion. In contrast, rural commodity shipments increased by 3% to 5.3 billion Australian dollars, boosted by cereals and cereal preparations (22%) and wool and sheepskins (9%). At the same time, non-monetary gold shipments increased by 59% to 2.3 billion Australian dollars, and net merchandise exports increased by 29% to 44 million Australian dollars.

- AUD: In October 2021, Australia’s imports of goods and services fell by 3% month-on-month to a six-month low of A$31.83 billion, as long-term lockdown measures to curb rising delta tensions in several vital states weakened Domestic demand. Arrivals of intermediate products and other commodities fell by 1% to 11.71 billion Australian dollars, affected by processing industrial supplies (net exports-4%) and other capital goods parts (net exports-6%). In addition, capital goods imports fell by 8% to A$6.65 billion, dragged down by net capital goods exports (down 37%); consumer goods fell 1% to A$8.65 billion, and household appliances (down 19%) led the decline. In addition, the number of service arrivals fell by 2% to A$4.47 billion, mainly due to transportation (-1%) and other services (-3%).

 

• CHART OF THE DAY:

On Thursday, the exchange rate of the New Zealand dollar against the US dollar hovered at a one-year low near 0.6810. The New Zealand dollar fell in the previous trading day under the hawkish tendencies of the Federal Reserve. On Wednesday, Fed Chairman Jerome Powell reiterated that U.S. policymakers would discuss early termination of the central bank's stimulus plan at the next meeting and acknowledged that inflation might not fall back in the second half of next year as most forecasters currently expect. At the same time, the Reserve Bank of New Zealand raised the official cash rate by 25 basis points to 0.75% at the last meeting, which was in line with expectations, but did not meet market expectations for a more aggressive 50 basis point rate hike. , Analysts believe that this will support the euro more. RBNZ chief economist Young-Ha also said recently that due to the new coronavirus protection framework, the latest variant of Omicron is unlikely to change the central bank's interest rate hike plan.• NZDUSD - D1, Resistance around ~ 0.72918 & 0.78095, Support around ~ 0.67839 & 0.65158.

 

Start trading in four simple steps

1. Register

Open your live trading account

2. Verify

Upload your documents to verify your account

3. Fund

Deposit funds directly into your account

4. Trade

Start trading and choose from 130+ instruments

Demo account

The Blue Suisse Trading Account with virtual funds in a risk-free environment

Demo account

Live account

The Blue Suisse Trading Account in our transparent live model environment

Open an Account
Risk Warning; CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58.58% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
x
Spotify Logo Apple Podcasts Logo Anchor Podcasts Logo