US equity futures, oil rally as sentiment stabilizes – .

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US equity futures, oil regains ground after Omicron hits – .


  • Asian Stock Markets:
  • US Equity Futures Bounce Back, Bonds Give Up Some Gains
  • Nikkei recovers initial losses, sentiment stabilizes
  • Omicron spreads, but markets hope effects will be mild
  • Oil rebounds 5% after Friday’s drop

SYDNEY, Nov. 29 (Reuters) – U.S. equity futures caused the market to rebound on Monday as investors prepared to wait a few weeks to see if the Omicron coronavirus variant would really derail the economic recovery and plans for tightening of some central banks.

Oil prices rebounded more than $ 3 a barrel to recoup some of Friday’s bombardment, while safe-haven bonds and the yen lost ground as markets clung to hopes that the worrisome new variant would turn out to be “light”.

With Omicron already as far away as Canada and Australia, a South African doctor who has treated cases said symptoms of the virus have so far been mild. Read more

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“Another key difference is that there are now much higher vaccination rates around the world compared to the emergence of Delta,” said Craig James, chief economist at asset manager CommSec.

“What the news on Omicron highlights is the need for central banks and governments to take a cautious approach to removing economic support and stimulus. “

Trading was erratic on Monday, but there were signs of stabilization as S&P 500 futures rose 1.0% and Nasdaq futures rose 1.2%. Both indices suffered their biggest drop in months on Friday, as travel and airline stocks hit hard.

EUROSTOXX 50 futures rose 1.7%, while FTSE futures strengthened 1.3%.

The largest MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) fell 0.1%, but found support ahead of its 2021 low. Likewise, Japan’s Nikkei (.N225 ) recovered its initial losses to be virtually unchanged.

Bonds returned some of their gains sizable, as Treasury futures fell 16 ticks. The market had recovered strongly as investors took into account the risk of a slower start to rate hikes from the US Federal Reserve and less tightening from other central banks.

Two-year Treasury yields climbed to 0.56%, after falling 14 basis points on Friday in the largest drop since March of last year. Fed funds futures had pushed back the first rate hike for about a month.

The shift in expectations undermined the US dollar, in favor of safe havens of the Japanese yen and the Swiss franc.

On Monday, the dollar had stabilized somewhat at 113.71 yen, after slipping 1.7% on Friday. The dollar index held at 96.190, after falling 0.7% on Friday.

The euro was struggling again at $ 1.1276, after rebounding from $ 1.1203 late last week.

European Central Bank President Christine Lagarde has shown courage in the face of the latest virus alert, saying the euro area is better equipped to deal with the economic impact of a new wave of COVID infections -19 or the Omicron variant. Read more

The economic agenda is also loaded this week with Chinese manufacturing PMIs on Tuesday to offer another update on the health of the Asian giant. The US ISM factory survey was released on Wednesday, ahead of Friday’s wages.

Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen speak to Congress Tuesday and Wednesday.

In commodities markets, oil prices rebounded after suffering their biggest one-day drop since April 2020 on Friday.

“This move virtually guarantees that the OPEC + alliance will suspend its planned January increase at its December 2 meeting,” an ANZ analyst wrote in a note.

“These headwinds are the reason why it has only increased production gradually in recent months, despite a strong rebound in demand. “

Brent rebounded 4.8% to $ 76.20 a barrel, while US crude rose 5.2% to $ 71.71.

Gold has so far found little safe-haven demand, leaving it stuck at $ 1,791 an ounce.

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Reporting by Wayne Cole; Editing by Richard Pullin, Shri Navaratnam and Lincoln Feast.

Our Standards: Thomson Reuters Trust Principles.

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