The last month of 2021 begins with a roundup of economic reports for November, most of them PMIs.
First, there is the Markit manufacturing PMI from Australia, which improved slightly by climbing to 59.2, a full basis point compared to the previous report.
Australia also published its QoQ and YoY GDP growth rate reports for the third quarter, which both exceeded investors’ expectations.
Furthermore, Russia and South Korea both released slightly better manufacturing PMIs today as well.
In Europe, Germany and Spain disappointed investors with worse than expected PMIs for November. Italy did better, but the overall eurozone Markit manufacturing PMI failed to meet the forecast, measuring 58.4.
In addition, Germany disappointed the markets on another count as well - retail sales. They amounted to -2.9%, where a drop of just -2% was expected.
By the end of the day we also expect PMI reports from the United Kingdom, the United States, and Canada. The US is releasing two reports - Markit and IHS.
But the main concern of the financial markets at present remains Omicron. After a few days of extreme pessimism and risk aversion, it seems that things are finally calming down. Data from South Africa so far hasn’t shown that the new variant has proven deadlier, as lethalities have remained at the same rate as before the new variant was identified.
Thus, there is hope that even if Omicron becomes the next dominant strain of Covid-19, it wouldn’t cause severe complications. Israeli health authorities have suggested that booster doses of the existing vaccines seem helpful at preventing severe disease even with the new variant, though this data is only preliminary.
Overall, the markets are a bit more hopeful that the new strain of the coronavirus is not going to be as bad as initially feared, and risk appetite is increasing among investors as a result.
Us stock indices will trade higher today on the improved sentiment, while safe haven assets will weaken.
