News & Analysis

Covid concerns were on top of markets’ mind over the last week as the emergence of the Omicron variant led to a deterioration in risk sentiment, with some countries re-imposing travel restrictions and domestic measures as well. The uncertainties have been heavily driving markets over the past five days, with risk assets taking a plunge while markets looked past most of the economic data as the focus remained on headlines around the Omicron variant. Due to the large unknowns around the virus, with little information known on transmissibility and vaccine efficacy, FX markets were in wait-and-see approach throughout the second half of the week. It will likely take a couple of weeks for scientists to announce more concrete information on the new variant, and while those concerns are still lingering, markets will have to play it by ear. Next week’s calendar includes a Bank of Canada meeting and a National Bank of Poland meeting, along with several CPI releases including the US. While the BoC is expected to hold fire on Wednesday, Thursday’s speech from BoC Deputy Governor Gravelle will be heavily watched for clues around the normalisation path. The NBP is expected to hike rates by at least another 50bps to combat the rise in inflation, after the central bank suddenly changed its mantra on inflation in October and has expressed concerns around rising prices since.

You can read Monex’s full Week Ahead here:

DOWNLOAD THE FULL REPORT

 

Authors: 

Simon Harvey, Senior FX Market Analyst

Ima Sammani, FX Market Analyst

 

 

Disclaimer
This information has been prepared by Monex Canada Inc., an execution-only service provider. The material is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is, or should be considered to be, financial, investment or other advice on which reliance should be placed. No representation or warranty is given as to the accuracy or completeness of this information. No opinion given in the material constitutes a recommendation by Monex Canada Inc., or the author that any particular transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, it is not subject to any prohibition on dealing ahead of the dissemination of investment research and as such is considered to be a marketing communication.