Themes

• General mood is “risk on”
• U.S. equities post their best gains since March
• Oil prices rise on a larger draw in private inventories

What’s Moving

A weakening of safe haven concerns as players begin to settle in living with Omicron saw a move back into risk currencies overnight, with the AUD and CAD the best performers on the day. USD sales were reportedly unwinding of longs ahead of year end and amid the better U.S. stocks.

U.S. stocks caught a good bid overnight, spurred by movement on the U.S. debt ceiling impasse and as Omicron fears begin t subside slightly.

Commodities were also broadly firmer as funds put the money made from USD longs back to work. Oil prices surged on news that private oil inventories saw a larger than expected draw.

Thoughts

Asia is expected to consolidate overnight moves today, with little in the way of key data or events slated for release. What is slated is Japanese final GDP, which is expected to have contracted 1.1%.

It looks to be a quiet night ahead as well, with little major data or events scheduled in the European or U.S. time zones. Expect risk appetite around Covid fears to continue to dominate flows.

Pivot Points