Themes

• General mood is “risk off”
• U.S. market starting to believe that Omicron is less of a concern
• U.S. Market closed on Friday

What’s Moving

The U.S. market took solace from data showing that while Covid infections are rising, the Omicron strain isn’t as severe. Traders are now starting to believe that Omicron might provide a level of natural immunity to the virus going forward.

This saw strong buying in U.S. equities and also saw a light “risk on” bid emerge for commodity currencies, with the AUD and CAD seeing the most benefit. Sterling also saw strong buying in the London Fix, which translated to a decent bid across the entire overnight session.

Data had little impact on the day, with U.S. final GDP printing firmer than expected at 2.3%.

Thoughts

With no data slated for release in Asia today, expect the market to largely consolidate overnight moves today. BoJ Governor Kuroda is set to speak but should have little impact on trading.

Tonight’s session sees U.S. Durable Goods and Initial Claims set for release, although with the U.S. market closed Friday, expect little in the way of major swings.

Pivot Points