Quantitative Easing

Stocks rise, dollar set for worst week since September as Omicron fears ebb

Passers-by wearing face masks walk past an electronic board displaying global stock indices, amid the coronavirus disease (COVID-19) pandemic, in Tokyo, Japan, November 1, 2021. REUTERS / Issei Kato

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HONG KONG, Dec.24 (Reuters) – Most Asian stock markets edged up on Friday and the safe-haven dollar was declining, a sign that the Omicron variant would not significantly derail global economic growth.

The greenback was heading for its worst week since September, as other risky assets, from bitcoin to the Australian dollar, held onto their recent gains, supported by fading concerns about the severity of the new COVID-19 variant.

The largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) rose 0.2%, and the Japanese Nikkei (.N225) edged up 0.1%, after the S&P 500 (.SPX) finished at a record closing high.

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Some markets, however, have fallen on more stringent measures to contain the spread of Omicron. China’s blue chips (.CSI300) fell 0.32% per day after rising infections in the northwestern city of Xi’an led to the lockdown of its 13 million residents. Read more

“As it looks like neither the tapering nor the Omicron variant will have too much of an effect on the economy, globally money is flowing into equities,” said Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong.

The U.S. Federal Reserve announced last week that it would accelerate the reduction of its massive bond purchase program and paved the way for three interest rate hikes in 2022, but that hasn’t disrupted markets like in 2013 when the Fed reduced its quantitative easing after the financial crisis. . Read more

Meanwhile, economists believe the Omicron strain of COVID-19 is unlikely to prevent a second consecutive year of above-trend growth, even if they – and more importantly epidemiologists and public health experts – are trying to assess the impact of the variant on health services given its apparent reduced severity but increased transmissibility. Read more

The US and Treasury stock markets will be closed for the holidays on Friday, but the S&P 500 and Nasdaq futures contracts gained 0.66% and 0.8%, respectively, in Asian times.

Pan-regional Euro Stoxx 50 futures jumped 1.35%.


In forex markets, the dollar index, which measures the greenback against six major peers, was at 96.067, little changed on the day but was down 0.6% since Friday’s close – its worst week since early September.

The dollar lost ground on most currencies, with the exception of the yen, another safe haven. The Japanese currency was at 114.38 per dollar on Friday and 82.75 per Australian dollar, almost at the same level as in late November when news about the Omicron variant first emerged.

The Aussie was at $ 0.7236, just after its five-week high of $ 0.7252 reached overnight, and the pound, which hit a monthly high of $ 1.3437 on Thursday, was at $ 1.341 for the last time, up 1.4% on the week.

“Cautious optimism that Omicron is less severe than Delta supports risky assets,” CBA Forex analysts said in their daily note.

The benchmark 10-year Treasury yield was 1.4926 at their close on Thursday, after hitting more than a one-week high of 1.5010% earlier in the session as investors sold off government bonds under the risk mood. UST /

In line with the same trend, bitcoin rose 4.5% on Thursday, its best day in nearly two weeks, and held onto those gains on Friday in Asia, trading just above $ 51,000.

Trading models in the world’s largest cryptocurrency are gradually aligning more with risk and risk movements in traditional markets as the influence of institutional investors increases.

Oil prices fell in thin holiday trading on Friday, breaking a three-day rally. Brent crude futures slipped 0.47% to $ 76.49 per barrel. American markets are closed.

The weak dollar helped gold continue to advance 0.6% on the day and 1.15% on the week to $ 1,818 an ounce.

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Editing by Jacqueline Wong

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