Market Quick Take - December 8, 2021 Market Quick Take - December 8, 2021 Market Quick Take - December 8, 2021

Market Quick Take - December 8, 2021

Macro 6 minutes to read
Saxo Strategy Team

Summary:  Equity markets blasted sharply higher yesterday as the market rushed to erase the concerns triggered by the omicron virus outbreak, as well, perhaps as due to the recent clear shift into a more hawkish stance from the US Federal Reserve. Overnight, the Chinese renminbi strengthened to match its strongest level this year versus the US dollar as China has been sending stronger signals that it is set to stimulate growth next year.

What is our trading focus?

Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - global equities were significantly lifted yesterday due to more positive evidence over the Covid-19 variant Omicron with Nasdaq 100 futures up 3.1% and extending the momentum today in early European trading hours. This was the biggest single day rally in US technology stocks in nine months. The key resistance level is at the 16,435 level which was the local resistance level a couple of times back in late November.

USDCNH – The USDCNH rate has plunged to match the lows of the year just above 6.35 after yesterday saw the USD weakening sharply on a resurgence of risk sentiment. A break of the lows would shift the focus to the post-2015 foreign exchange regime shift lows of 2018. It is notable that China has maintained a strong renminbi policy even as the USD has strengthened recently amidst the more hawkish Fed shift and despite weak EM currencies elsewhere. The stronger price action since yesterday may be on hopes that China’s growth is set to pick up on its new apparent shift toward more stimulus and as omicron covid news has eased some of the initial uncertainties.

USDCAD – the USD has turned lower on the resurgence of risk appetite after initial blows from the omicron variant news, that particularly hit oil prices hard, taking CAD and other oil-sensitive currencies down with it. The last two sessions have seen a sharp repricing of USDCAD from above 1.2800 to well below 1.2700 yesterday, ahead of today’s Bank of Canada meeting (previewed below). Whether USDCAD can continue to erase the rally off the sub-1.2300 lows will likely depend on the degree to which global markets can get back on track with pricing a stronger economic outlook and a full return of the commodities bull market, led by oil prices. The Bank of Canada will likely fulfill market expectations of hawkish guidance as it is likely warming up for a January hike.

Gold (XAUUSD) trades higher for a second day but has so far found resistance at the 200-day moving average, currently at $1792.50. A general improvement in risk appetite has supported a steady but so far unimpressive recovery from last week’s slump. Focus on silver (XAGUSD) which is also trying to establish support at $22 following its recent 13% drop. Focus on omicron developments through its indirect impact on bonds and the dollar. Copper (COPPERUSMAR22) meanwhile remains stuck in a relatively tight range, but supported by Chinese trade data which showed a strong pickup last month. The metal’s loss of momentum during 2H-21 has seen the speculative long being cut to near an 18-month low.

Crude oil (OILUKFEB22 & OILUSJAN22) trades lower after an industry report pointed to the biggest gain in US stockpiles of oil and products since February. Overall, the market has put in a strong performance since last week's slump in the belief the omicron variant is unlikely to derail the global recovery. Flare-ups around the world resulting in temporary lockdowns is however likely to prevent the market from returning to pre-omicron levels at this point. The API last night reported a 3.1-million-barrel build in oil stocks with a 2.4 million rise at Cushing helping send the WTI prompt spread down to just $0.2/b after trading close to $2 in early November. The EIA in its Short-term energy outlook lowered its 2022 Brent average price to $70 as the agency still sees a surplus emerging next year.

US Treasuries (IEF, TLT). The front part of the US yield curve rose yesterday, with 3-year yields breaking above 1% ahead of the US treasury auction. The move helped to attract high demand from investors. The 3-year note sale was priced at 1%, the highest auction yield since February 2020. Following the auction, yields fell slightly with news concerning the debt ceiling contributing to this trend. The house passed a bill that makes the debt ceiling faster to raise, it will be necessary to have a simple majority vote at the senate. It decreases the chances of default in mid-December easing the compressing forces on long-term yields. However, the expectations of tighter monetary policies continue to put upward pressure on short-term yields, while long-term yields remain compressed by Covid distortions. Therefore, we continue to see scope for a bear flattening of the yield curve. Today, the focus is going to be on the 10-year US Treasury auction.

What is going on?

Pfizer covid vaccine offers partial protection from omicron variant, according to early study. Researchers in South Africa saw a very large reduction in the production of antibodies for patients who had received two doses of the Pfizer vaccine who were infected with the omicron variant of covid, suggesting that immune protection is far lower, but not completely lost.

US President Biden warns Russian President Putin on Ukraine attack – in a video conference call lasting some two hours yesterday, Biden said that the US and its allies would support Ukraine with “strong” measures if attacked, both in the form of “defensive material” and economic measures while Putin blames NATO and its overtures to Ukraine for the tense situation. Sources indicate that the US could push to have the Nord Stream 2 pipeline shut off if Russia invades Ukraine.

US House Approves Bill that would allow Senate to raise debt ceiling with a simple majority vote. This avoids the prospect of brinksmanship over the debt ceiling issue, as the Democrats can pass the vote in the Senate without Republican help. The debt ceiling issue was set to hit crunch time as early as next week and could theoretically have raised the specter of a US default. How high the Democrats could raise the debt ceiling via this process is not yet known.

HelloFresh warns of lower operating profit in 2022. The fresh meal-kit company says that it sees FY22 adjusted EBITDA of €500-580mn vs est. €630mn expected by analysts driven by rising input costs.

What are we watching next?

Today’s Bank of Canada meeting, which is likely to tilt hawkish. With the US Fed having made a clear switch to focusing on inflation fighting, and after Bank of Canada governor Macklem penned an op-ed in the Financial Times on the need for a being ready to respond with the appropriate tools if inflation proves more sustained, the market is leaning for more hawkish Bank of Canada guidance at today’s meeting at minimum, with a minority of observers actually looking for a rate hike at today’s meeting, though most expect a “set-up” meeting for a rate hike in January.

This week’s earnings: Today’s focus is UiPath which is part of the bubble stocks segment and the meme stock GameStop as both stocks are a good barometer on risk sentiment. Analysts expect UiPath to deliver 42% revenue growth in Q3 (ending 31 October).

Wednesday: Huali Industrial Group, GalaxyCore, Kabel Deutschland, Dollarama, Brown-Forman, UiPath, GameStop, RH, Campbell Soup

Thursday: Sekisui House, Hormel Foods, Costco Wholesale, Oracle, Broadcom, Lululemon Athletica, Chewy, Vail Resorts

Friday: Carl Zeiss Meditec

Economic calendar highlights for today (times GMT)

0815 – ECB President Lagarde to speak
0830 – ECB’s Guindos to Speak
1310 – ECB's Schnabel to speak
1500 – Canada Bank of Canada Rate Decision
1500 – US JOLTS Job Openings survey
1530 – US Weekly DoE Crude Oil and Product Inventories
2130 – Brazil Selic Rate Announcement
2205 – Australia RBA Governor Lowe to speak
0001 – UK Nov. RICS House Price Balance
0130 – China Nov. CPI / PPI


Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:

Apple Sportify Soundcloud Stitcher


The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.