EQUITIES
Shares in Asia-Pacific largely fell in Monday trade as investors continue to monitor developments surrounding the recently discovered Omicron COVID-19 variant.
The Nikkei 225 in Japan leading losses regionally, dropping 1.71% by the afternoon. Hong Kong’s Hang Seng index also saw sizable losses, falling 1.21%. In mainland China, the Shanghai composite was down 0.38%.
South Korea’s KOSPI declined 0.67%, the Australia’s S&P/ASX 200 fell 0.54%, and the Straits Times index in Singapore slipped 1.12%.
OIL
Oil prices rose on Monday, recouping some losses after suffering their largest one-day drop since April 2020 on Friday. Investors looked for bargains but remained cautious with the focus on the Omicron coronavirus variant and Iran nuclear deal negotiations.
All eyes will be on how the Omicron will affect global economy and fuel demand, OPEC+ action and Iran nuclear talks this week.
The Brent now traded at $74.88 per barrel, and U.S. crude futures traded at $70.73 per barrel.
On Friday last week, the Brent futures ends at $72.72 a barrel. The WTI crude oil prices fell to $68.15 per barrel, down more than 12%, to it’s the lowest level in more than 2-1/2-month.
CURRENCIES
The U.S. dollar index - which measures the currency against six major peers - held at 96.215, after dipping to a one-week low of 95.973 on Friday. Benchmark 10-year yields rose 6 basis points to 1.543%.
Bitcoin prices were also higher, recovering after a Friday plunge. The cryptocurrency was trading at $57,390, while ether jumped 7% to $4,332.
GOLD
Gold prices edged higher on Monday as concerns over the impact of the possibly vaccine-resistant Omicron coronavirus variant supported the precious metal's safe-haven appeal.
Spot gold rose 0.18% to $1,795.10 per ounce. U.S. gold futures advanced 0.50% to $1,796.80.
Spot silver rose 1.15% to $23.40 per ounce. Platinum gained 1.33% to $967.00, while palladium was flat at $1,780.00.
ECONOMIC OUTLOOK
Financial markets were on edge on Monday as investors prepared to see if the Omicron coronavirus variant would really derail a nascent reopening of economies around the world and the tightening plans of some central banks.
Overall, however, markets were a bit calmer compared to the sell-off last Friday as investors waited on more data to assess the extent of Omicron's impact, with several analysts cautioning that trade could be choppy for the next few weeks. The top U.S. infectious disease official, Dr Anthony Fauci, told President Joe Biden it will take about two weeks to have definitive information on the Omicron.
Travel stocks took a hit in Monday trade. In Japan, shares of Japan Airlines fell 3.93% while ANA Holdings declined 4.15%. Australia’s Qantas Airways slipped 2% while shares of Cathay Pacific in Hong Kong dropped 4.14%. In Singapore, shares of Singapore Airlines declined 2.18%.
Multiple countries, including the U.S., U.K, Japan, South Korea, Indonesia, Philippines, and some European countries have started to close borders to foreign visitors from this week.
The economic diary is also busy this week with China's manufacturing PMIs on Tuesday to offer another update on the health of the Asian giant. The U.S. ISM survey of factories is out on Wednesday, ahead of payrolls on Friday. Fed Chair Jerome Powell and Treasury Secretary Janet Yellen speak before Congress on Tuesday and Wednesday.
OPEC+ will meet on Thursday, when a policy decision will likely be announced on whether to adjust its plan to increase output by 400,000 barrels per day in January and beyond.
