Themes

• General mood is “risk off”
• U.S. announces first case of Omicron Covid variant
• U.S. ADP Non-Farm Employment change at 534k and better than the 525k expected  

What’s Moving

The Omicron news hit U.S. stocks overnight, which in turn saw a strong flight into the USD, which promoted gains for the Dollar against all the majors. Best gains were seen against Sterling, with most pairs ending the session near USD highs for the day.

Gold also caught a bid as a good flight to safety bid emerged. This seems to be the path of least resistance for the time being, especially ahead of year-end and the holiday season. Crude oil was also slightly weaker after a lower-than-expected reduction in inventories.

Thoughts

After the wild overnight moves again in U.S. trade, expect a more moderate session in Asia today. The market has tipped its short-term hand and will be watching U.S. Omicron numbers for short-term direction. Players will also eye Friday’s U.S. Non-Farm Payroll numbers.

Today sees little more than Australian Retail Sales (E: 4.9%) and Trade (E: $11.25bln) numbers. 

Pivot Points