The US dollar and yen are in demand in early New York trade as the risk trade turns lower.
The theme so far today has been positive momentum and European stock markets are up 1% but the mood is beginning to turn as the dollar hits the highs of the day and oil stumbles.
Crude traders are closely watching the OPEC+ meeting tomorrow but all accounts suggest that the planned 400K bpd increase will go ahead. At the same time, there are growing questions about whether all OPEC+ members have the capacity to meet demand.
In FX, it’s all about global growth worries around omicron. Healthcare systems in many places were near breaking points ahead of omicron because of the pandemic but this latest wave might hit breaking points. Meanwhlie, in China the lockdown in Xian continues with another 122 cases yesterday and the outbreak in Hong Kong is growing.
Hopes that China was curbing the crackdown in the property sector are fading after officials ordered the demolition of 39 Evergrande residential buildings under construction in a landmark project that’s been ongoing for 8 years.
The economic calendar today features the US Markit manufacturing PMI and construction spending. Canada is closed for holiday.