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Europe

Dead cat bounce? as the European session 29 November, 2021 bounced back.

That may be true, but risk assets are leading the charge today, albeit with gains that pale in contrast to the decline seen on Friday due to Omnicron concerns.

There will still be a lot of back and forth in this current tale since we won’t know the full impact of the Omicron variation for a few weeks.

However, when it expands to additional nations and leads to further border closures (and perhaps lockdowns), sentiment will deteriorate as the year comes to a close.

Expect the major guys like the US and Europe to return to harsh lockdown measures, albeit the proliferation of COVID-19 itself, Omnicron apart, is already raising concerns for the latter, as evidenced in Germany’s predicament in particular.

However, one can never say never when it comes to this, so if we trend in that way, there is a significant negative risk to consider for markets in general.

After toying with the concept of reopening borders in recent months, Asia is likely to take a more cautious approach. This will only contribute to the global view and the openness of travel in general.

Again, it all depends on how severe of a threat Omnicron is, and I believe that at this point, “no news is good news” is an approach that market players may use when navigating through the headlines.

Otherwise, any genuine good news, such as vaccination efficacy against Omnicron, is still some weeks away, so anticipate things to remain volatile in the interim.

Russia

Russia claims that its OPEC+ partners did not request a review of the present agreement.
According to Russian Energy Minister Alexander Novak, there is no need for emergency actions in the oil market.
He is remaining cool following Friday’s 13% drop in prices. And with the possible danger of the Omnicron variety, we may see OPEC+ defer any scheduled output increases for January at its meeting later this week.

USA

On Monday, November 29, 2021, there will be three different Federal Reserve speakers.
• At 2000 GMT, Federal Reserve Bank of New York President John Williams kicks off a virtual event called “Introducing the New York Innovation Center.”
• 2005 (GMT) Before the event, Federal Reserve Chairman Jerome Powell makes an introductory statement.
• 22:05:05 GMT Michelle Bowman, Federal Reserve Board Governor, speaks on “Central Banks and Indigenous Economies” before a virtual Symposium on Indigenous Economies featuring the Bank of Canada, the Tulo Centre of Indigenous Economics, and the Reserve Bank of New Zealand.
As a side note, Bank of Canada Governor Macklem will speak at the Bowman symposium at 1900 GMT.

China

The December bond payments for China’s property developers are expected to be over $1.3 billion. The good news is that this is far less than the almost $2 billion that was due in November.
Bloomberg has a nice graphic of outstanding debts ahead (which may be gated). The graph may be found by following the link.

Also, the Wall Street Journal (which may be gated) reported on certain developers’ inability to pay their debts:
While Evergrande has been able to scrape enough finances to make last-minute bond payments thus far, at least four developers have defaulted on their dollar bonds since early October.

Others are selling assets in order to raise funds.
It appears that more asset sales will take place in December.