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2022 Finds U.S. Dollar & Oil Up, Omicron Spreading

The dollar traded higher on Monday morning in Asia while many major Asia Pacific markets, including the Japanese, Chinese, Australian, and New Zealand markets are shut due to holidays. U.S. equity futures went up while Asia Pacific shares were mixed on Monday morning. Trading for some markets was low on the first day of the new trading year.
Trading for the China Evergrande Group shares was suspended in Hong Kong with the deep-in-debt property developer not providing any justification for the event. At the same time, S&P 500 and Nasdaq 100 contracts advanced in the first days of 2022.

Asia’s factory activity continued to grow in December, as reported by data released today, Monday. The expansion was supported by strong demand and the easing of supply-chain bottlenecks.

The Omicron variant of Covid-19 is once again in the investors’ spotlight and continues to affect sentiment. The latest variant is swiftly spreading all around the globe with the number of global cases exceeding 290 million as of today, Monday.

Oil entered the new year trading higher despite increasing Covid-19 cases affecting demand sentiment, as output from Libya fell. On Saturday, Libya’s state oil firm announced that it would reduce its production by 200,000 barrels per day for a week because of maintenance work on a main pipeline.

All eyes are on Tuesday’s OPEC+ meeting where production will be discussed. In the meantime, oil analysts have lowered their price forecast for 2022 due to the omicron variant possibly affecting the recovering fuel demand.

What to Watch out for this Week:

Wednesday
Release of FOMC meeting minutes

Thursday
Fed Bank of St. Louis’ CEO, James Bullard, talks about the U.S. economy & monetary policy

Friday
Fed Bank of San Francisco’s President & CEO, Mary Daly, talks about monetary policy

Saturday
ECB’s member of executive board, Isabel Schnabel’s speech