Equity indexes start the week weak

The Dow Jones, S&P 500 and the Nasdaq all fell during the US Sunday evening Globex session with risk adversely impacted as the spread of the Omicron variant intensified and saw The Netherlands announce strict lockdown until mid-January. Also weighing, and of more significance IMO, was news out of the US over the weekend that US Senator Manchin has said he is a no to US President Biden’s ‘Build Back Better’ huge spending plan.

Goldman Sachs cut their US GDP forecasts in response to the Manchin news.

In regional equities both China and HK indexes are lower.

The People’s Bank of China today cut its one-year Loan Prime Rate (LPR) by a tiny 5bps, from 3.85% to 3.80%. This is the first cut to the rate since April of 2020 and likely is merely the first step in a series of easings ahead given the ructions in China’s property markets and other disruptions.

Oil slumped on the news of the lockdown in the Netherlands on fears of demand pulling back. Its not just the Netherlands but the worry lockdowns will spread more widely again. Germany has ruled out a lockdown ahead of Christmas, UK Chancellor of the Exchequer Rishi Sunak and other government ministers there have said they do not want similar in the UK either. News reports indicated UK Prime Minister Boris Johnson is considering requesting people limit their movements over the holiday period. Good luck with that.

Meanwhile, major forex rates have barely moved on the session. Ranges have been very small indeed with little net movement. NZD/USD fits that description but is just a touch weak. New Zealand health authorities are investigating a man’s death the believe may be linked to the Pfizer Covid-19 vaccine.

 Head of Trading Dimitar Kalapov

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