Forex news for Asia-Pacific trading on December 6, 2021:
- The latest South African covid data is a mixture of good and bad news
- Talk of an RRR cut from China
- Iran nuclear talks expected to re-start later this week but signs so far are negative
- The crypto market had a rough weekend --bitcoin falls through $50,000
- ANZ overall job ads +7.4% m/m
- Gold down $2 to $1781
- S&P 500 futures +0.5%
- WTI crude oil up $1.44 to $67.70
- US 10-year yields up 4.2 bps to 1.383%
- AUD leads, CHF lags
The early tone in markets was constructive as risk trades attempt to bounce back from Friday's bruising session. So far, yields and AUD crosses have bounced from some key levels and oil is showing signs of life.
Naturally, it's very early but some traders have been circulating articles highlighting indications that infection with omicron has been mild. In the most-optimistic case, this variant replaces delta and the virus is slowly downgraded to something much less serious, particularly for vaccinated people.
It's way too early to say that's the base case but it's a basis for optimism. Whether that's delusion or not will be borne out by incoming data.
For now, AUD/USD is up 21 pips to 0.7022 after the plunge on Friday to the worst levels of the year. It all begs the question of just how much negativity is priced in around omicron and whether the market can see beyond yet another variant.
Overall, these market moves aren't much but they're consistent throughout markets. That sentiment will no-doubt be tested by climbing case counts in the day ahead and worries about central bank tightening. The RBA is due up tomorrow and that will shake things up.