Macro Roundup (Dec 28)

SHANGHAI, Dec 28 — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar edged higher against a basket of currencies on Thursday, but its gains were capped as easing fears of fallout from the Omicron coronavirus variant supported higher risk currencies such as the Australian dollar and British pound.

Ahead of the holidays and extended long weekend in the United States, most major currency pairs clung to narrow ranges.

The dollar index, which measures the greenback against six major peers, was up 0.07% at 96.174. The index remains close to the 16-month high hit late last month.

Upbeat news on the vaccines and omicron-related hospitalizations helped boost investors’ appetite for risk, lifting stocks and pushing U.S. Treasury yields higher.

U.S. stock indexes rose Monday as markets reopened after the Christmas holiday and investors assessed the spread of the omicron Covid-19 variant.

The S&P 500 gained nearly 1.4% to close at 4,791.19, marking its 69th record close of the year. The index also hit an intraday record for the first time in more than a month. The Dow Jones Industrial Average added 351.82 points, or roughly 1%, at 36,302.38. The Nasdaq Composite ticked up about 1.4% to 15,871.26.

Market strategists remained positive on the overall equity outlook amid a surge in Covid cases. New studies suggest the omicron strain has a lower risk of hospitalization than other Covid variants.

Oil prices rose on Monday due to hopes that the Omicron COVID-19 variant will have a limited impact on global demand in 2022, even as U.S. crude came under pressure from flight cancellations amid surging cases.

More than 1,300 flights were cancelled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.

Global benchmark Brent crude ended the day up 3.2%, or $.46, at $78.60 per barrel. U.S. West Texas Intermediate (WTI) crude settled 2.4%, or $1.78, higher at $75.57 per barrel. The U.S. market was closed on Friday for a holiday.

Gold prices reversed course to approach a one-week peak on Monday, as renewed risks to global economic growth from rising cases of the Omicron coronavirus variant overshadowed pressure from a firmer U.S. dollar.

Spot gold was up 0.1% at $1,809.67 an ounce by 12:34 EDT, maintaining above the key $1,800 level reached last week. U.S. gold futures gained 0.1% to $1,810.60 per ounce.

The German Dax and France’s CAC 40 both rose 0.2% by the early afternoon, while Spain’s Ibex index was up 0.6%.

Market players have been juggling concerns over coronavirus restrictions and tighter central bank policy with signs that the heavily mutated omicron strain of the virus is milder than earlier variants like delta.

New studies in South Africa and the U.K. last week suggested omicron has a reduced risk of hospitalization and severe illness.

In the U.K. over the weekend, infections were still topping 100,000, while France has also reported cases above that figure for the first time.