Daily Market Commentary 21st December 2021

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Global equity markets crashed to open the final trading week before Christmas. The latest mutation of the virus, or more particularly, the political reaction to the latest virus, struck fear into markets. This follows a week of losses suffered in the week prior. Markets were trading nervously prior to the latest revelation, with supply chain, energy and inflationary crises enveloping global markets. The fears of further economic and social lockdowns have triggered the latest sell off. US Bond Yields fell and the US Dollar was mixed, with the EUR rising to 1.1280, while the GBP fell back to 1.3210.

Commodity demand was hit hard and the associated currencies also paid a price, with the AUD falling below 0.7100, while the NZD is testing 0.6700. Oil prices have crashed to US$67/barrel, while global growth forecasts have been reviewed lower. This is happening in an environment of spiralling input prices (PPI) feeding the inflation (CPI) dragon.

This does not bode well for the ‘Santa Claus Rally’!?

Collinson & Co Contact