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Below are Views On Daily Global Market Update 29 November 2021 By Asheesh Chanda, Kristal.AI

All about Omicron

US equities traded for half a day on Friday and price action (like almost everywhere else) was dominated by the pre-Thanksgiving discovery of the Omicron variant in southern Africa. The risk off move continued as equities and yields were lower with havens like JPY trading up. The US dollar and gold didn't do much though with the dollar weaker toward the end of last week. Crypto moved a leg up over the weekend with Bitcoin moving from 54k to 58k levels. Crude sold off on Friday with WTI briefly falling below 70 before recovering later. The spread with Brent is now at USD 4 and on the higher end of the recent range. OPEC+ meeting has been pushed to later in the week, as they are expected to reconsider preset supply increases after the SPR release and the new variant now.

Not much is known about the potency of this new variant. On the bright side, thanks to scientists in South Africa, the world has been made aware of its existence far earlier in the cycle than say the Delta variant - which had spread across significant parts of rural India before awareness hit. It also does not appear to be any more life threatening than the other variants, but it's still early days here. On the down side, its spike protein has significantly more mutations, which could make vaccines less effective against it and Omicron cases have already been reported in Netherlands, Australia and Canada. Most countries have stopped flights from southern Africa and others, like India, have tightened restrictions across the board.

This narrative is likely to play out over the course of the next few weeks as more information comes to light. The PMI numbers which out later in the week (at the start of Dec) are likely to see a dip in sentiment. Broadly, consumer demand has managed to persist, as seen in Black Friday sales - which were lower than pre pandemic levels but are significantly higher than 2020. Cyber Monday sales (today) are expected to be buoyant as well.”

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