Daily Market Commentary 2nd of December 2021

Equity markets settled overnight, after the rollercoaster sustained over the last few trading days. The omicron virus and the Fed’s projected moves to taper monetary policy much quicker than previously indicated, both hit markets hard. The virus mutation may be much less dangerous than the media speculated, while the Fed’s shift in monetary policy had to be expected, considering the rampant inflation smashing economies across the world. The US Dollar continued to lose ground, with the EUR rallying to 1.1320, while the Yen hit 112.70. US Bond Yields have settled lower, while commodity prices have fallen, lead by Oil down to US$66/barrel.

US ADP Jobs report was in line with expectations, ahead of the all important Non Farm Payrolls, to be released tonight. PMI data across Europe and the US was steady and inline with expectations, while Chinese PMI turned negative and slipped below 50. The AUD rallied in domestic trade, boosted by the better than expected GDP growth numbers. GDP was expected to contract by 2.7%, reflecting lockdowns in the two largest States, but came in at only a 1.9% fall. The AUD rebounded on the news, but drifted back to settle just above 0.7100, while the NZD looked to hold above 0.6800.

Markets will continue to monitor stats on the virus and NZ will look at the release of trade data in domestic markets. The focus will turn to Non Farm Payroll numbers released in the US tonight.