NAB – The Morning Call · China and Omicron hopes drive a bounce back

China and Omicron hopes drive a bounce back

Tuesday 7th December 2021

US equites are roaring back, so is oil, with bond yields rising again. This newfound optimism has been driven by policy easing measures from China’s central bank, and less concern about the impact of the Omicron strain. It’s still too early to draw definitive conclusions on the virus, says NAB’s Rodrigo Catril, with reports from South Africa that there is a concerning rise in younger patients. Tougher measures on mandatory vaccines for workers could also ignite more protests that could have the opposite impact on take-ups, which could slow economies, particularly in Europe. Not much is expected from the RBA today, but the build-up of positive data is likely to force a policy change in February. Meanwhile, the jury is still out on the Bank of England next week, but market expectations around a rate rise are falling.

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