US Session (12/20/2021)

Concerns about President Joe Biden's economic agenda, as well as the omicron coronavirus outbreak, weighed on investor sentiment. Traders said the market's movements were exacerbated by lower volume ahead of the holidays.

The S&P 500 fell the most in three days since September, led by losses in financial and material stocks. Bonds fell in value. The value of the dollar had hardly changed.

Goldman Sachs economists reduced their forecasts for US growth after Democratic Senator Joe Manchin surprised the White House by rejecting Biden's roughly $2 trillion tax-and-spending package. Meanwhile, Europe's major powers debated additional COVID-19 restrictions.

Senator Joe Manchin won't support Build Back Better legislation

 

Asia Session (12/20/2021)

Asian stocks and US equity futures rose providing some relief from the gloomy investor mood caused by the escalation of omicron coronavirus cases and the challenges to President Biden's economic agenda.

The asia-pacific share gauge of MSCI reversed a two-session drop, with Japan, China, and Hong Kong climbing.

The S&P500 and Nasdaq100 contracts were in the green, indicating some stabilisation after the broader US equity benchmark fell the most in three days since September.

Treasury yields and the US dollar were little changed, while commodity-linked currencies remained stable. Crude oil and iron ore prices have risen.


Europe Session (12/20/2021)

Monday as amid uncertainty about President Biden's economic plans and mounting worldwide omicron infections, prompting selloffs in stocks, equity futures, and oil while strengthening sovereign bonds.

After Moderna stated its vaccine raised antibody levels against Omicron, US futures sank at least 1%, but European shares pared losses. Treasury bonds rose and the dollar kept its gains from Friday, while crude oil fell on concerns that travel restrictions to alleviate the stress might affect demand.

Senator Joe Manchin surprised the White House on Sunday by rejecting Biden's approximately $2 trillion tax-and-spending programme, leaving Democrats with few alternatives for salvaging it. Goldman Sachs analysts cut their US economic growth projections.

Meanwhile, the possibility of European lockdowns are increasing, with UK authorities refusing to rule out potential tougher measures before Christmas, and the Netherlands returning to lockdown. Although US restrictions are unlikely to be necessary, Biden plans to warn the public on Tuesday about the dangers of not being vaccinated, and his top medical adviser has warned that hospitals may be overburdened.

Russia’s Deputy PM Novak: On January 4, OPEC+ will address the necessity to amend the agreement conditions.

OPEC+ compliance with oil output restrictions increased marginally to 117% in November. - Sources

ECB's de Cos: Rate hikes are unlikely in 2022 - Expansion

BoJ's Governor Kuroda: It is too soon to think about normalizing monetary policy.


Tuesday FX Option Expiries

EUR/USD: 1.1500 (EU864.3M), 1.1300 (EU846.9M), 1.1350 (EU782.6M)
USD/JPY: 112.70 ($562M), 115.00 ($350M), 113.75 ($350M)
USD/CAD: 1.2650 ($450M), 1.2850 ($360M), 1.2940 ($333M)
GBP/USD: 1.3450 (GBP373.3M)
USD/CNY: 6.4000 ($650M), 6.3700 ($360M)
USD/BRL: 5.6700 ($645M), 5.5500 ($365M), 5.5000 ($320M)
AUD/USD: 0.7275 (AUD378M)