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Market Shifts Into A Risk-Off Mood As Moderna CEO Raises Doubts On Vaccine Efficacy


  • Market shifts into a risk-off mood as Modera CEO foresaw materially lower efficacy of existing vaccines against the Omicron.
  • EU inflation and growth data running better but ECB members maintain their dovish stance.
  • Euro Zone Nov Preliminary CPI YoY reading of 4.9% was its 5th month above ECB target and record high since EUR currency launch.


  • South Korea Oct Industrial Production M/M: -3.0% v -0.1%e; Y/Y: 4.5% v 2.0%e.
  • Japan Oct Jobless Rate: 2.7% v 2.8%e.
  • Japan Oct Preliminary Industrial Production M/M: 1.1% v 1.9%e; Y/Y: -4.7% v -4.4%e.
  • China Nov Manufacturing PMI (Govt official) registered its 1st expansion in 3 months (50.1 v 49.7e ).
  • Japan Fin Min Suzuki held his 1st virtual meeting with US Treasury Sec Yellen and had the US explain inflation in context of US economic situation. Did not discuss currencies but noted FX stability was important. Japan was closely watching currency moves and impact on economy.


  • Moderna CEO stated that he believed that the current coronavirus vaccines would not be as effective against the Omicron Variant of coronavirus.
  • UK Health Sec Javid noted that if Omicron variant was proven to be no more dangerous than the Delta variant then all the latest measures would be immediately removed. Focused was on hospitalizations related to Omicron.
  • UK MPs to debate and vote on new Covid restrictions in England – including face coverings in shops and public transport.


  • ECB’s De Guindos (Spain) stated that was watching omicron variant closely. Covid situation was different from that in 2020 as now had vaccination. Net asset purchases could be resumed if necessary after ending in March. Stressed that monetary policy must remain accommodative” after pandemic emergency purchase program had ended. ECB would not go ahead with tapering like the Fed.


  • Fed Chair Powell testified in Senate that greater virus concerns could slow job market progress and intensify supply chain woes; Omicron variant added to economic risks and inflation uncertainty.
  • Treasury Sec Yellen testified that she was confident at this point that the US recovery remained strong and reiterated that it was critical that Congress addressed the debt limit.


  • EU’s Mora stated that felt extremely positive about meeting regarding Iran nuclear talks; Discussions in Vienna to continue.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -1.40% at 460.70, FTSE -1.38% at 7,011.73, DAX -1.47% at 15,056.50, CAC-40 -1.51% at 6,673.73, IBEX-35 -1.91% at 8,293.50, FTSE MIB -1.51% at 25,649.00, SMI -0.86% at 12,115.37, S&P 500 Futures -1.19%].

Market Focal Points/Key Themes:


  • European Indices trade lower amid risk aversion flows following FT interview given by vaccine maker Moderna’s CEO who expressed opinion that current COVID-19 vaccines going to see a material drop in their efficacies against new Omicron variant. Meanwhile, Easyjet trades lower 2% following its final results, capacity guidance for next quarters and comments that it is not seeing any impact to Q3 or Q4 yet from Omicron. In other corporate news, Volvo Cars reported its first resutls after recent IPO and also trade lower as much as 3%.
  • Zara brand parent company Inditex changed both CEO and Chairman trading lower in Madrid, while OSE Immunotherapeutics in Paris trades sharply higher on positive COVID-19 vaccine data. Shares of Barclays trade slightly lower in London as traders repricing their inflation and rate hikes expectations.
  • Looking ahead notable earners include Baozun, UP Fintech, RedHill Biopharma and Salesforce, Zscaler after US markets close.
  • Consumer discretionary: EasyJet [EZJ.UK] -2% (earnings; Moderna CEO comments on vaccine efficacy), Inditex [ITX.ES] -4% (new CEO and Chairman).
  • Financials: Barclays [BARC.UK] -1% (rate hikes expectation repricing).
  • Healthcare: OSE Immunotherapeutics [OSE.FR] +12% (vaccine data), Molecular Partners [MOLN.CH] +7% (data on Omicron variant).
  • Industrials: Volvo Cars [VOLCAB.SE] -3% (earnings).
  • Technology: Future plc [FUTR.UK] +15% (earnings), Micro Focus [MCRO.UK] -4% (strategy update).


  • EU Drug Regulator chief Cooke testified in EU Parliament that did not know if new vaccines against Omicron variant were needed but preparing for that. Working with international regulators, World health and ECDC to ensure we prepared for the worst.
  • EU health commissioner Kyriakides issued a letter stressing that govts needed to boost efforts to detect coronavirus mutations; sequencing must be stepped up. Already faced with a challenging winter due to the high transmissibility of the Delta variant. Might now experience further or additional pressures because of the appearance of the Omicron variant.
  • EU Economic Commissioner Gentiloni (Italy) noted that the new Omicron variant posed a new risk but there was no need to panic; Conditions for full lockdown were not fulfilled. Growth perspective was uncertain.
  • ECB’s Weidmann (hawk, steps down after Dec meeting) stated that should be wary of any pressure to maintain its very loose course longer than the price outlook dictates.
  • ECB’s Villeroy (France): EU exemptions should be temporary on Basel III.
  • Italy PM Draghi stated that was prepared to continue intervening in order limit the impact of rising energy prices.
  • Russia Central Bank (CBR) Gov Nabiullina stated that she expected inflation to slow to target by end-2022. Inflation near the upper end of year-end forecasts. CBR could hold or even raise rates by up to 100bps at the Dec 17th policy meeting.
  • Thailand Central Bank official Chayawadee stated that the spike in inflation might be short-lived. To monitor new covid variant and supply disruptions. It saw 2021 GDP growth at or above 0.7% and noted that any impact from Omicron virus variant might be felt during 2022.
  • China said to have begun preliminary vaccine studies on Omicron variant (**Note: earlier China CDC stated that Chinese Vaccines were effective against the Omicron variant).

Currencies/Fixed Income

  • Sobering vaccine news offset earlier comfort from very early hints that Omicron might be milder than feared.
  • The pandemic moved back onto the front burner for FX price action and replace the policy divergence theme of global central banks.
  • USD was soft in the session as market participants were pushing back bets for Fed tightening because of the risk to growth.
  • EUR/USD tested above 1.1350. The upside could hit resistance at 1.15 approach despite Inflation in the region continued to run red hot. ECB policy makers have recently stuck to their dovish stance despite higher inflation data.
  • USD/JPY at 2-week lows with the pair under 1.13 handle as the yen was the main beneficiary of safe-haven flows.
  • Bond yields were lower as risk appetite waned with the US 10-year trading in the 1.42% area.

Economic data

  • (NL) Netherlands Oct Retail Sales Y/Y: 4.3% v 4.7% prior.
  • (FI) Finland Q3 GDP Q/Q: 0.8% v 2.2% prior; Y/Y: 4.2% v 8.2% prior.
  • (FI) Finland Oct House Price Index M/M: +1.1% v -0.8% prior; Y/Y: 3.6% v 3.1% prior.
  • (ZA) South Africa Oct M3 Money Supply Y/Y: 3.2% v 4.1%e; Private Sector Credit Y/Y: 1.3% v 1.8%e.
  • (FI) Finland Sept Final Trade Balance: €0.1B v €0.1B prelim.
  • (NO) Norway Oct Credit Indicator Growth Y/Y: 5.3% v 5.3% prior.
  • (DK) Denmark Q3 Preliminary GDP Q/Q: 0.9% v 2.2% prior; Y/Y: 3.6% v 9.8% prior.
  • (DK) Denmark Oct Gross Unemployment Rate: 3.1% v 3.3% prior; Unemployment Rate (seasonally adj): 2.7% v 2.9% prior.
  • (TR) Turkey Q3 GDP Q/Q: 2.7% v 3.3%e; Y/Y: 7.4% v 7.4%e.
  • (TH) Thailand Oct Current Account Balance: -$1.1B v -$1.7Be; Overall Balance of Payments (BOP): +$1.2B v -$3.4B prior; Trade Account Balance: $3.8B v $4.0B prior; Exports Y/Y: 17.0% v 17.8% prior; Imports Y/Y: 20.1% v 20.4% prior.
  • (FR) France Q3 Final GDP Q/Q: 3.0% v 3.0%e; Y/Y: 3.3% v 3.3%e.
  • (FR) France Nov Preliminary CPI M/M: 0.4% v 0.2%e; Y/Y: 2.8% v 2.6%e.
  • (FR) France Nov Preliminary CPI EU Harmonized M/M: 0.4% v 0.2%e; Y/Y: 3.4% v 3.2%e.
  • (FR) France Oct PPI M/M: 2.9% v 1.7% prior; Y/Y: 14.9% v 11.6% prior.
  • (FR) France Oct Consumer Spending M/M: -0.4% v 0.0%e; Y/Y: -5.3% v -5.0%e.
  • (ES) Spain Sept Total Mortgage Lending Y/Y: 57.9% v 48.3% prior; House Mortgage Approvals Y/Y: 57.7% v 66.9% prior.
  • (ES) Spain Oct Adjusted Retail Sales Y/Y: -0.7% v -0.1% prior; Retail Sales (unadj) Y/Y: -2.5% v +0.2% prior.
  • (CH) Swiss Nov KOF Leading Indicator: 108.5 v 109.0e.
  • (AT) Austria Nov Preliminary CPI M/M: 0.7% v 0.6% prior; Y/Y: 4.3% v 3.7% prior.
  • (AT) Austria Oct PPI M/M: 3.1% v 1.2% prior; Y/Y: 13.9% v 10.6% prior.
  • (CZ) Czech Q3 Preliminary GDP (2nd reading) Q/Q: 1.5% v 1.4%e; Y/Y: 3.1% v 2.8%e.
  • (HU) Hungary Sept Average Gross Wages Y/Y: 9.1% v 9.3%e.
  • (SE) Sweden Sept Non-Manual Workers Wages Y/Y: 3.1% v 3.1% prior.
  • (HK) Hong Kong Oct Retail Sales Value Y/Y: 12.0% v 9.7%e; Retail Sales Volume Y/Y: 9.4% v 6.7%e.
  • (DE) Germany Nov Net Unemployment Change: -34.0K v -25.0Ke; Unemployment Claims Rate: 5.3% v 5.4%e.
  • (ES) Spain Sept Current Account Balance: €2.2B v €1.0B prior.
  • (IT) Italy Q3 Final GDP Q/Q: 2.6% v 2.6%e; Y/Y: 3.9% v 3.8%e.
  • (NO) Norway Central Bank (Norges) Dec Bank Daily FX Purchases (NOK): 0M v 0Me.
  • (IS) Iceland Q3 GDP Q/Q: -2.3% v +4.2% prior; Y/Y: 6.0% v 7.3% prior.
  • (IS) Iceland Oct Final Trade Balance (ISK): -12.8B v -12.5B prelim.
  • (CZ) Czech M2 Money Supply Y/Y: 8.2% v 8.8% prior.
  • (PL) Poland Nov Preliminary CPI M/M: 1.0% v 0.5%e; Y/Y: 7.7% v 7.3%e.
  • (PL) Poland Q3 Final GDP Q/Q: 2.3% v 2.1% prelim; Y/Y: 5.3% v 5.1% prelim.
  • (PT) Portugal Nov Preliminary CPI M/M: 0.5% v 0.5% prior; Y/Y: 2.6% v 1.8% prior.
  • (PT) Portugal Nov Preliminary CPI EU Harmonized M/M: 0.3% v 0.4% prior; Y/Y: 2.7% v 1.8% prior.
  • (ZA) South Africa Q3 Unemployment Rate: 34.9% v 34.4% prior (record high).
  • (SL) Sri Lanka Nov CPI Y/Y: 9.9% v 7.6% prior.
  • (EU) Euro Zone Nov Advance CPI Estimate Y/Y: 4.9% v 4.5%e; Core CPI Y/Y: % v 2.3%e (5th month above target and record high since EUR currency launch).
  • (IT) Italy Nov Preliminary CPI M/M: 0.7% v 0.1%e; Y/Y: 3.8% v 3.2%e.
  • (IT) Italy Nov Preliminary CPI EU Harmonized M/M: 0.8% v 0.1%e; Y/Y: 4.0% v 3.3%e.
  • (BE) Belgium Q3 Final GDP Q/Q: 2.0% v 1.8% prelim; Y/Y: 4.9% v 4.7% prelim.
  • (GR) Greece Sept Retail Sales Value Y/Y: 10.1% v 5.3% prior; Retail Sales Volume Y/Y: 13.0% v 7.5% prior.
  • (GR) Greece Oct PPI Y/Y: 23.5% v 19.9% prior.

Fixed income Issuance

  • (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2030, 2037 and 2040 bonds.
  • (IT) Italy Debt Agency (Tesoro) sold total €4.25B vs. €3.25-4.25B indicated range in 5-year and 10-year BTP Bonds.
  • Sold €2.0B vs. €1.5-2.0B indicated range in 0.00% Aug 2026 BTP bonds; Avg Yield: 0.19% v 0.28% prior; Bid-to-cover: 1.52x v 1.53x prior (Oct 28th 2021).
  • Sold €2.25B vs. €1.75-2.25B indicated range in 0.95% Jun 2032 BTP; Avg Yield: 1.02% v 1.05% prior; bid-to-cover: 1.47x v 1.35x prior.
  • (IT) Italy Debt Agency (Tesoro) sold €1.5B vs. €1.0-1.5B indicated range in 0.65% Apr 2029 Floating Rate Note (CCTeu); Avg Yield: +0.02% v -0.01% prior; Bid-to-cover: 1.49x v 1.73x prior.

Looking ahead

  • (MX) Mexico Oct YTD Budget Balance (MXN): No est v -362.0B prior.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (IN) India Oct Fiscal Deficit (INR): No est v 588.4M prior.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
  • 05;30 (DE) Germany to sell €3.0B in 0.25% Nov 2028 Bund.
  • 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
  • 06:00 (PT) Portugal Q3 Final GDP Q/Q: 2.9%e v 2.9% prelim; Y/Y: No est v 4.2% prelim.
  • 06:00 (PT) Portugal Oct Retail Sales M/M: No est v 1.5% prior; Y/Y: No est v 2.7% prior.
  • 06:00 (PT) Portugal Oct Industrial Production M/M: No est v 1.6% prior; Y/Y: No est v -5.4% prior.
  • 06:00 (IL) Israel Oct Chain Store Sales M/M: No est v 0.1% prior.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (IN) India Oct Eight Infrastructure (Key) Industries: No est v 4.4% prior.
  • 07:00 (IN) India Q3 GDP Y/Y: 8.3%e v 20.1% prior; GVA Y/Y: 7.7%e v 18.8% prior.
  • 07:00 (ZA) South Africa Oct Trade Balance (ZAR): 23.0Be v 22.2B prior.
  • 07:00 (ZA) South Africa Oct Monthly Budget Balance (ZAR): -33.0Be v -7.3B prior.
  • 07:00 (BR) Brazil Sept National Unemployment Rate: 12.8%e v 13.2% prior.
  • 07:00 (CL) Chile Oct Unemployment Rate: 8.2%e v 8.4% prior.
  • 07:00 (CL) Chile Oct Retail Sales Y/Y: 20.1%e v 19.9% prior; Commercial Activity Y/Y: No est v 17.9% prior.
  • 07:00 (CL) Chile Oct Industrial Production Y/Y: No est v -0.7% prior; Manufacturing Production Y/Y: 2.0%e v 4.3% prior; Total Copper Production: No est v 451.1K tons prior.
  • 07:00 (MX) Mexico Sept Gold Production: No est v 6.8K kilograms prior; Silver Production: No est v 338.7K kilograms prior; Copper Production: No est v 406.7K tons prior.
  • 07:30 (BR) Brazil Oct Primary Budget Balance (BRL): 31.4Be v 12.9B prior; Nominal Budget Balance: -20.3Be v -42.0B prior; Net Debt to GDP Ratio: 58.2%e v 58.5% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:00 (UK) BOE’s Mann.
  • 08:30 (CA) Canada Sept GDP M/M: 0.0%e v 0.4% prior; Y/Y: 3.3%e v 4.1% prior; Quarterly GDP Annualized: +3.3%e v -1.1% prior.
  • 08:55 (US) Weekly Redbook LFL Sales data.
  • 09:00 (US) Sept FHFA House Price Index M/M: 1.2%e v 1.0% prior; Q/Q: No est v 4.9% prior.
  • 09:00 (US) Sept S&P Case-Shiller House Price Index (20-City) M/M: 1.25%e v 1.17% prior; Y/Y: 19.35%e v 19.66% prior.
  • 09:00 (US) Sept S&P Case-Shiller House Price Index (overall) Y/Y: No est v 19.84% prior.
  • 09:00 (EU) Weekly ECB Forex Reserves.
  • 09:45 (US) Nov Chicago Purchase Managers Index: 67.0e v 68.4 prior.
  • 09:45 (UK) BOE to buy £1.47B in APF Gilt purchase operation (20+ years).
  • 10:00 (US) Nov Consumer Confidence: 110.7e v 113.8 prior.
  • 10:00 (MX) Mexico Oct Net Outstanding Loans (MXN): N0 est v 4.671T prior.
  • 10:00 (MX) Mexico Weekly International Reserve data.
  • 10:00 (CO) Colombia Oct National Unemployment Rate: No est v 12.1% prior; Urban Unemployment Rate: No est v 13.0% prior.
  • 10:00 (US) Fed chief Powell with Treasury Sec Yellen testifying in Senate.
  • 10:30 (US) Fed’s Williams.
  • 13:00 (US) Fed’s Clarida.
  • 13:30 (BR) Brazil Oct Total Formal Job Creation: +260.0Ke v +313.9K prior.
  • 16:30 (US) Weekly API Oil Inventories.
  • 16:45 (NZ) New Zealand Oct Building Permits M/M: No est v -1.9% prior.
  • 17:00 (AU) Australia Nov Final PMI Manufacturing: No est v 58.5 prelim.
  • 18:00 (AU) Australia Nov CoreLogic House Price Index M/M: No est v 1.4% prior.
  • 18:50 (JP) Japan Q3 Capital Spending Y/Y: 1.5%e v 5.3% prior; Capital Spending (ex-software) Y/Y: 3.0%e v 3.6% prior.
  • 19:00 (KR) South Korea Nov Trade Balance: $2.0Be v $1.7B prior; Exports Y/Y: 27.2%e v 24.1% prior (revised from 24.0%); Imports Y/Y: 39.6%e v 37.7% prior.
  • 19:01 (UK) Nov BRC Shop Price Index Y/Y: No est v -0.4% prior.
  • 19:30 (AU) Australia Q3 GDP Q/Q: -2.5%e v +0.7% prior; Y/Y: 3.0%e v 9.6% prior.
  • 19:30 (JP) Japan Nov Final PMI Manufacturing: No est v 54.2 prelim.
  • 19:30 (KR) South Korea Nov PMI Manufacturing: No est v 50.2 prior.
  • 19:30 (TW) Taiwan Nov PMI Manufacturing: No est v 55.2 prior.
  • 19:30 (ID) Indonesia Nov PMI Manufacturing: No est v 57.2 prior.
  • 19:30 (TH) Thailand Nov PMI Manufacturing: No est v 50.9 prior.
  • 19:30 (PH) Philippines Nov PMI Manufacturing: No est v 51.0 prior.
  • 19:30 (MY) Malaysia Nov PMI Manufacturing: No est v 52.2 prior.
  • 19:30 (VN) Vietnam Nov PMI Manufacturing: No est v 52.1 prior.
  • 20:01 (IE) Ireland Nov PMI Manufacturing: No est v 62.1 prior.
  • 20:45 (CN) China Nov Caixin China PMI Manufacturing: 50.6e v 50.6 prior.
  • 22:00 (CN) China to sell 3-year and 7-year Upsize Bonds.
  • 23:00 (ID) Indonesia Nov CPI M/M: 0.3%e v 0.1% prior; Y/Y: 1.7%e v 1.7% prior; CPI Core Y/Y: 1.4%e v 1.3% prior.


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