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Following a quiet start, risk became a touch twitchy by the time Wall Street closed yesterday. There is a general sense of apprehension, which is still very much present today.
While the general risk tone has mellowed considerably, investors are probably still behaving cautiously ahead of the Fed’s meeting tomorrow. Not to mention a handful of reasons that keep things on the shaky side for the time being.
For one thing, inflation worries remain, which might lead to a more hawkish Fed this week. Later today’s US PPI statistics will serve as a bit of a preview before the major event tomorrow.
Second, the omicron form has arrived in China. While it hasn’t made a large impression yet, be mindful of the Chinese government’s reaction. Authorities have been firm about their zero-COVID policy, therefore expect further stringent measures/restrictions to be implemented.
As a result, global supply networks may be impacted even more. The scenario in Zhejiang earlier in the day gave us a hint of what was to come. This sets off a chain reaction that leads to more inflation in the future. And that’s when the above-mentioned pressure on central banks kicks in again.
For the time being, stocks are holding steady with a little rise, while bond rates remain unchanged. But, given the circumstances, we may be in for a more volatile second half of the week, if nothing else. So fasten your seatbelts.
Guangzhou, China, identifies one omicron variant infection in a foreign visitor.
State media in China has reported on the situation. • In case you missed it, here’s the news from Tianjin from yesterday.
When it comes to the spread of illnesses, keep an eye on China once more. Local governments implement a strong zero-COVID policy, which may result in additional viral measures/restrictions being implemented. As a result, if nothing else, global supply networks may suffer even greater damage.
The patient in issue was discovered to be ill on December 13th. After landing in Guangzhou from Shanghai on December 11, the patient is allegedly subject to a 14-day quarantine. According to reports, the patient was returning from a foreign nation and is currently being treated in a hospital.
Switzerland November producer and import prices increased by 0.5 percent compared to +0.6 percent m/m the previous month.
The Federal Statistics Office has issued the most recent statistics, which is dated December 14, 2021.
Producer and import prices are up 5.8 percent year on year, while prior prices are up 5.1 percent.
Another month, another month of rising producer prices. This aligns with the regional storey of rising cost pressures and will support inflation as the year comes to a close. However, Swiss inflation remained mainly muted, posing less of a challenge for the SNB.
France says it has no intentions to modify current COVID-19 prevention methods.
According to Gabriel Attal, a spokeswoman for the French government, there are around 130 omicron instances in the nation.
Despite the fact that omicron is becoming more common, Attal claims that the government will not modify laws to slow the virus’s spread – at least for the time being. In terms of travel limitations with the United Kingdom, he said, “we are looking at the issue.”
The decision is slightly positive for companies, but if the virus spreads too far, it may be difficult to retain things as they are in the coming weeks/months. But, once again, we’ll see. If hospitals can handle it, it’s a win-win situation for everyone.