ASX200 – A Quiet Economic Calendar Leaves COVID-19 in Focus as the Markets Look ahead to the FED

The ASX200

It was back into the red, with the ASX200 seeing a 4-day winning streak come to an end on Thursday. Partially reversing a 1.25% rally from Wednesday, the ASX200 fell by 0.28% to end the day at 7,385.

Uncertainty over the new Omicron strain and mixed reports, which had weighed on the European majors on Wednesday, pegged back the ASX200.

Optimism that the strain was less virulent had fueled Wednesday’s breakout. Reports from South Africa of the Pfizer vaccine being as much as 40 times less effective weighed, however. With more time needed to ascertain exactly how effective the existing vaccines are and whether a booster or 3^rd dose would be sufficient, uncertainty will likely continue to hang over the global financial markets.

The Stats

There were no major stats from Australia to provide direction.

From China, inflation accelerated further in November. There was some comfort, with wholesale pressures easing, albeit modestly.

In November, China’s annual rate of inflation accelerated from 1.5% to 2.3%. Economists had forecast an annual rate of inflation of 2.5%. Month-on-month, consumer prices increased by 0.4% versus a forecasted 0.3% rise. In October, consumer prices had risen by 0.7%.

Significantly, however, was softer wholesale inflation. In November, the annual wholesale rate of inflation eased from 13.5% to 12.9. Economists had forecast an annual wholesale rate of inflation of 12.4%.

The Market Movers

It was a mixed day for the banks. CBA and NAB both ended the day up by 0.21% respectively. Macquarie Group fell by 0.53%, however, with ANZ (-0.18%) and Westpac (-0.24%) also seeing red.

Commodity stocks also had a mixed session. Fortescue Metals Group Ltd rallied by 1.50% to lead the way, with Newcrest Mining ending the day up by 0.26%. Rio Tinto and BHP Group saw red, however, falling by 0.94% and by 1.20% respectively.

Other Asian Markets

Elsewhere, it was a mixed session. The CSI300 and the Hang Seng Index rallied by 1.66% and by 1.08% respectively, while the Nikkei 225 joined the ASX200 in the red, with a 0.47% loss.

The Day Ahead

It’s another particularly quiet day ahead on the Aussie economic calendar. There are no material stats from Australia to provide direction through the session.

The lack of stats will leave the majors in the hands of the U.S markets and COVID-19 news updates. With the FOMC meeting just days away and U.S inflation figures due out in today’s U.S session, it could prove to be a testy day…

The Futures

In the futures markets, at the time of writing, the ASX200 was down by 10 points.

For a look at all of today’s economic events, check out our economic calendar.