European markets had a disappointing start to the week, dropping sharply yesterday on increasing concerns over the spread of Omicron, and government’s reaction to rising cases, with little in the way of Christmas cheer for those looking for further gains into year end.
It’s also worth considering that some of the volatility is being exacerbated by the absence of a lot of market participants as they finish early before picking up the baton again early next year. This may help explain why yesterday’s sharp moves lower weren’t matched by a move higher in gold prices, which would normally be the case in a risk-off move.
US markets also fell sharply after Democrat senator Joe Manchin said he couldn’t support the President’s new $1.9trn build back better infrastructure bill, raising the prospect that US GDP could be substantially lower in 2022 as key projects get postponed or pared back. Against a backdrop of concerns about rising inflation and less accommodative central banks, we saw big drops across the board but in particular in…
