Thu, Jan 20, 2022 @ 08:25 GMT
HomeContributorsFundamental AnalysisOmicron Remains In Focus As Borders Shutdown Again

Omicron Remains In Focus As Borders Shutdown Again

General trend

  • Omicron variant expected to weigh on the market after down day Friday in the US, travel restricts go back in place, potentially weighing on the global recovery and Moderna CMO warns current vaccines may not work against it; but expects new version of vaccine ready for early 2022.
  • S&P and NASDAQ futures open higher in early Asia trade and continued to trade higher during the session, while Brent traded up by 5% after Friday’s losses.
  • USD remained generally stronger across the majors as, safe haven flows continue to reign, while sentiment stabilizes.
  • Aussie business inventories notably lower than expected in Q3, potential downside pressure on growth outlook. Japan retail sales in line, auto component weakest with supply shortages continuing. Looking ahead to tomorrow’s data, China official PMIs.
  • Macau gambling names all trade lower by nearly 8% or more at the open after SunCity CEO and 11 others were detained over illegal gambling platforms they set up outside of Macau.
  • RBNZ notes Omicron would have to be a “game changer” in order to adjust rate path, including a pause at next meeting in Feb.
  • Japan and New Zealand both confirm no cases of variant yet, Japan PM confirms shutdown of borders until more information is know.

Headlines/Economic Data

Australia/New Zealand

  • ASX 200 opened -0.5%.
  • (AU) AUSTRALIA Q3 CORP OP PROFIT Q/Q: 4.0% V 2.3%E; INVENTORIES Q/Q: -1.9% V 0.0%E.
  • (NZ) Reserve bank of New Zealand (RBNZ) Chief Economist Yuong Ha: impact of new COVID variant would need to be dramatic to change cash rate outlook, could pause tightening at next meeting in Feb if Omicron is a game changer.
  • (AU) China has allowed a small amount of coal from Australia to clear in October, unclear if this is a sign year+ long restrictions may be eased.
  • (NZ) New Zealand lays out border reopening: Australian’s that are fully vaccinated will be able to come Apr 30th, 2022 and quarantine, citizens can return if vaccinated with no quarantine starting Jan 17th 2022.
  • (AU) Reserve Bank of Australia (RBA) Offers to buy A$1.60B in Govt bonds v A$1.60B prior.
  • (NZ) New Zealand PM Ardern: No confirmed cases of Omicron in New Zealand so far; New Variant is a reminder of border risks.

Japan

  • Nikkei 225 opened -1.4%.
  • (JP) JAPAN OCT RETAIL SALES M/M: 1.1% V 1.0%E; Y/Y: 0.9% V 1.1%E.
  • (JP) Japan PM Kishida: Considering additional border restrictions; watching omicron variant situation with sense of urgency.
  • (JP) Japan bans all entry to foreigners, effective Nov 30th.
  • 7201.JP CEO: Planning to introduce solid state battery by 2028, build factory in 2024; To invest >¥2.0T into electrification of vehicles over next 5 years (over the 1.0T speculated through 2030); To introduce 23 new EVs by 2030 – Ambition 2030 plan.

Korea

  • Kospi opened -1.0%.
  • (KR) South Korea Vice Fin Min Lee: To take preemptive measures on markets if needed; Monitoring possible impact of omicron variant on markets.

China/Hong Kong

  • Hang Seng opened -0.7%; Shanghai Composite opened -1.0%.
  • 1383.HK CEO has been detained in a probe along with 11 others after a group admitted to some gambling allegations including illegal cross border gambling, but have refused to cooperate with authorities.
  • (HK) Speculation that Hong Kong IPOs could remain weak into early 2022 with more difficult cyber security and overseas listing rules – press.
  • (CN) China Oct Industrial Profits Y/Y: 24.6% v 16.3% prior.
  • (CN) China expected to adopt a more proactive economic policy next year to meet the challenges from an uneven recovery of the global economy and instability in control and prevention of the pandemic – China Securities Times.
  • 9898.HK To price 11M share Hong Kong IPO around HK$388/shr, first day of trade Dec 8th.
  • (CN) China PBOC sets Yuan reference rate: 6.3872 v 6.3936 prior.
  • (CN) China PBOC Open Market Operation (OMO): Sells CNY100B in 7-day reverse repos v CNY100B prior; Net inject CNY50B v Net inject CNY50B prior.
  • (CN) Jiangsu Bioperfectus (688399.CN), Shanghai ZJ Bio Tech (688317.CN), and Zhejiang Orient (688298.CN) reported that their coronavirus test kits can detect the Omicron Variant of the coronavirus – Press.

Other

  • World Health Organization’s (WHO) issues statement on Omicron variant: not yet clear whether infection with Omicron causes more severe disease compared to infections with other variants, including Delta, but preliminary evidence suggests there may be an increased risk of reinfection with Omicron.
  • (PH) Philippines Central Bank (BSP) cuts term deposit offer to PHP480B and cuts 15-day TDF PHP20B; both effective Dec 1st.

North America

  • MRNA Chief Medical Officer: think Omicron may elude current vaccines; new vaccine for Omicron variant may be ready in early 2022.
  • (US) Oct ports 1,621K loaded inbound TEUs +3% m/m, +1% y/y.

Europe

  • (EU) ECB chief Lagarde: Eurozone is now better equipped for potential new wave of COVID-19 infections of Omicron variant; Reiterates ECB council stance that inflation spike is tied to temporary factors.
  • (IT) ECB’s Panetta (Italy; dove): ECB does not need to intervene on inflation for now, it is temporary, do not need to follow US Fed monetary policy choices.

Levels as of 00:15ET

  • Hang Seng -0.9%; Shanghai Composite -0.1%; Kospi -0.5%; Nikkei225 -1.4%; ASX 200 -0.4%.
  • Equity Futures: S&P500 +0.8%; Nasdaq100 +1.1%, Dax +1.8%; FTSE100 +1.3%.
  • EUR 1.1316-1.1272; JPY 113.88-113.36; AUD 0.7147-0.7115; NZD 0.6837-0.6812.
  • Commodity Futures: Gold +0.4% at $1,794/oz; Crude Oil +4.4% at $71.13/brl; Copper +0.4% at $4.34/lb.

 

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