Daily Market Commentary 30th December 2021

The ‘Santa Claus Rally’ is extending throughout the Christmas/ New Year period, of light trade, as is normal for this period. Liquidity in the system, globally, remains high fuelling the rally across the asset classes. The notable performer overnight was US Bond Yields, which surged to 1.55%, which may reflect confidence and inflationary pressures. The Federal Reserve must move on interest rates in 2022, with timing being the only question, while QE is dissolved. The US Dollar went south, with the EUR jumping to 1.1330, while the GBP fast approaches 1.3500.

Commodity prices remain bid and the flagging reserve allowed some recovery in the associated currencies. The NZD regained 0.6800, while the AUD consolidated strongly, above 0.7200. There is very little in the way of economic data releases globally to impact the equity rally, so markets will continue to focus on restrictions, surrounding the latest virus mutations and developments.