Archinomics Weekly 29.11.21
Architas (Now AXA IM Select)
Now a member of the AXA Investment Managers family and is now formally known as the business unit, AXA IM Select
Equities
US equity markets ended the Thanksgiving week in volatile form, in response to the new Omicron Covid-19 variant, led down by the leisure and travel sectors. European and Japanese markets fell sharply, while falls in China were more moderate.
Bonds
US Treasury yields fell, and prices rose, as investors sought safe haven assets. Core eurozone bond yields slipped back, on growth concerns, to end the week flat. Trading was light in corporate bond markets, although weakness was noted as the week ended.
Currencies
The US dollar benefitted from the increasing divergence in interest rate expectations throughout the week, rising against all majors, before the yen recovered a little ground on Friday’s safe-haven buying.
Commodities
The oil market was unimpressed by President Biden’s release from the Strategic Petroleum Reserve, regaining some ground, but fell sharply on demand concerns as news of the Omicron variant broke.
Responsible Investing
The Green Party will play a significant role in Germany’s new coalition government, and more ambitious targets on GhG (greenhouse gas) emissions have been outlined.
Macro
- The fast-spreading Omicron variant of Covid-19 was declared a ‘variant of concern’ by the World Health Organisation.
- US Federal Reserve Chair Jay Powell was confirmed for a second term of office, viewed by markets as a slightly hawkish choice.
- The governor of the Bank of England described himself as ‘uneasy on inflation’, while US retailer Dollar Tree raised all prices from $1 to $1.25.
On the radar
- US employment data on Friday are expected to show little change from October’s figures, while PMI data are also forecast to be steady.
- OPEC is set to postpone the meeting scheduled for 02 December, awaiting further clarity on the Omicron variant front.