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Weekly Markets Review

11 – 17   DECEMBER 2021
In Essence:
US In regular trading Thursday, the tech-focused Nasdaq Composite fell 2.47% for its worst day since September. The other averages saw more modest losses. The Dow fell 0.08%, while the S&P 500 lost 0.8%, reversing Wednesday’s gains.
EU Eurozone stocks fell on Friday as investors worried about surging Omicron cases and wrestled with this week’s hawkish turn from major central banks in the fight against inflation.
China Hong Kong stocks fell, snapping a three-day advance, as default by China Evergrande Group and Kaisa Group put about US$30 billion of bonds at risk of haircuts while China weakened its currency from a three-year high.
Sovereign BlackRock Inc. is warning investors against dipping back into east European bonds despite their increasingly fat premiums over German debt. The sell-off in Czech, Hungarian and Polish government bonds will continue next year.
Corporate Investors in the booming ethical bond market are having to swallow short term losses on the road to improving their green credentials. A global Bloomberg ESG index has lost 5.2% this year, underperforming a 4.6% drop in IG debt index.
USD/EUR The EUR/USD spiked at 1.1360, the highest level in two weeks, but it was unable to hold above 1.1350 and pulled back. The retreat is challenging the 1.1300 zone during the American session after the US dollar recovered ground across the board.
Standouts Turkey’s lira continued its descent, weakening past the 16-per dollar mark as a central bank pledge to end a four-month cycle of interest-rate cuts fails to convince investors that inflation can be brought to heel.
Oil Oil prices dipped on Friday, putting the market on track to end the week roughly unchanged, as surging cases of the omicron coronavirus variant raised fears new curbs may hit fuel demand, while a weaker dollar supported commodity markets broadly.
Gold Gold prices were flat on Friday, but on track for their best week since mid-November as the dollar weakened after the U.S. Federal Reserve decided to withdraw its pandemic-era stimulus, making bullion cheaper for holders of other currencies.
Emerging Markets:
Cryptos Bitcoin’s “relief rally” after the U.S. Federal Reserve officials approved the acceleration of its plan to withdraw the pandemic stimulus efforts appeared to be short-lived, as the oldest cryptocurrency dropped below $48,000 on Thursday.
Turkey The Banking Regulation and Supervision Agency (BDDK) has warned lenders operating in Turkey to strictly check that Turkish Lira-denominated loans granted to individuals and corporates are used properly.