Daily Market Bulletin – 20 December 2021

Market Developments

This holiday-shortened week begins with risk aversion, as investors digest news around Omicron and US infrastructure bill.

Omicron jitters persist as the variant spreads across the world, having been identified in 89 countries as of December 16, according to the World Health Organization's update on Friday. [1]

US Democratic Senator Joe Manchin said on Sunday that he will not support President Biden's roughly $2 trillion Build Back Better infrastructure plan, on a TV appearance on FOX. [2]. This pushes back hopes for passing the legislation within the year.

White House Press Secretary, Ms Psaki, responded by accusing the Senator of breaching his recent commitment to the President. [3]

In other news, The People's Bank of China cut its one-year loan prime rate to 3.8%.

A sea of red was seen across main Asia-Pacific stock markets, European futures follow suit and US 10YR Yields drop.

The US Dollar is supported and consolidates, but the main beneficiary of today's risk-off mood is the JPY Basket. Main Commodity currencies (AUD, NZD, CAD) drop against both.

Instruments Snapshot

EUR/USD finds support and tests 1.1250, following Friday's plunge.

GBP/USD could not avert losses last week and today it drops towards 1.3200.

USD/JPY is on the back foot and concedes 113.50, as risk aversion benefits the JPY.

USD/CAD rises past 1.2900 on risk off mood.

AUD/USD sheds around 0.5%, breaching 0.7100 for the same reason.

NZD/USD in similar mode, drops towards 0.6700.

GER30 plunges more than 1%, giving 15,200 up.

US30 also has a very poor performance, breaching 35,000.

USOIL plummets on Omicron fears, testing 68.00.

XAU/USD shows indecision around 1,800.

Economic Calendar Picks (GMT)

No major economic releases are expected today, while overnight, focus will shift to the minutes of the last monetary policy decision by the Reserve Bank of Australia.

See the economic calendar here.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 20 Dec 2021 https://www.who.int/publications/m/item/enhancing-readiness-for-omicron-(b.1.1.529)-technical-brief-and-priority-actions-for-member-states

2

Retrieved 20 Dec 2021 https://www.youtube.com/watch

3

Retrieved 23 Jun 2022 https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/19/statement-from-press-secretary-jen-psaki-4/

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