Modest gains were seen across global equity markets during last week’s holiday shortened trading period. The so called “Santa Rally” came despite surging Omicron cases across most of the world which saw several countries in Europe tighten controls ahead of the New Year celebrations. Despite that, investors were prepared to look through the case numbers, encouraged by data which shows Omicron as a mild variant of the virus.
With trading volumes understandably on the thin side, the S&P500 moved further into record territory with a weekly gain of +0.9%. In the UK, the FTSE100 and FTSE250 rose by +0.2% and +0.9% respectively with the Government refraining from introducing new COVID related measures. On the Continent, the German DAX added +0.8% and French CAC40 +0.9% whilst in Japan, the Nikkei 225 was flat despite industrial production data revealing an impressive monthly growth figure of +7.2% during November. 
Light trading volumes were also seen in the sovereign bond markets where modest yield increases were seen in both the UK and the US. The 10-year gilt yield rose by 5bps to 0.972% whilst the equivalent duration treasury yield added a single basis point to 1.499%. As for the Eurozone, its 10-year benchmark index yield increased by 7bps although it remained firmly entrenched in negative territory at -0.179%.
Moving to commodities, Brent Crude jumped by +3.7% to $78.98 a barrel having benefitted from those lower concerns relating to Omicron. Data in the US also showed crude inventories declining for a fifth straight week2. Elsewhere, both copper and gold also concluded the year with a positive weekly rise. The former rose by +1.5% to $9,741 a tonne on the back of higher activity in China whilst the latter added +0.8% to $1,822 an ounce. 
The Bank of England has already published its monthly consumer borrowing data for December which showed an increase in credit card lending and reduction in borrowing during the month. Other domestic data to keep an eye on this week include PMIs for the Services and Construction sectors which are due on Thursday and Friday respectively. Moving to the US, Friday’s Labour Market report is the standout publication due whilst the Institute for Supply Management releases its PMI equivalents throughout the week.
In the Eurozone, several final PMIs for December have already been released with increased manufacturing activity seen in both France and Italy. Other data to keep an eye on from the region this week include CPI inflation and retail sales, both of which are due on Friday. In China, data group Caixin releases its PMI figures representing the smaller entities in the economy. There are no major data releases due from Japan on this occasion. 
 T. Rowe Price, 04/01/2022
 Refinitiv, 04/01/2022
 Forex Factory, 04/01/2022
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