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Dollar, shares rise as Omicron fears subside

Published 12/01/2021, 09:25 PM
Updated 12/02/2021, 05:28 PM
© Reuters. FILE PHOTO: A man wearing a protective face mask, following an outbreak of the coronavirus, talks on his mobile phone in front of a screen showing the Nikkei index outside a brokerage in Tokyo, Japan, February 26, 2020. REUTERS/Athit Perawongmetha/File Ph

© Reuters. FILE PHOTO: A man wearing a protective face mask, following an outbreak of the coronavirus, talks on his mobile phone in front of a screen showing the Nikkei index outside a brokerage in Tokyo, Japan, February 26, 2020. REUTERS/Athit Perawongmetha/File Ph

By Herbert Lash

NEW YORK (Reuters) - A gauge of global equities surged on Thursday as Wall Street rallied on hopes the Omicron COVID-19 variant will prove mild and will not halt a strongly recovering U.S. economy, while the dollar edged higher in choppy trading as risk appetite improved.

The number of Americans filing new claims for unemployment benefits rose less than expected last week while layoffs tumbled to a 28-1/2 year low in November, both signs of tightening U.S. labor market conditions amid an accelerating economy.

"People feel a bit more confident that while the new variant might be highly contagious, it looks like so far the conditions are mild," said Marc Chandler, chief market strategist at Bannockburn Global Forex.

The blue-chip Dow posted its best one-day percentage gain since March with Boeing (NYSE:BA) Co providing the biggest lift after China's aviation authority gave a seal of approval to the planemaker's 737 MAX aircraft.

MSCI's all-country world index closed up 0.75% as Wall Street rallied. The Dow Jones Industrial Average rose 1.82%, the S&P 500 added 1.42% and the Nasdaq Composite advanced 0.83%.

While U.S. investors saw Omicron as mostly benign, European shares fell as countries ramped up restrictions to curb the variant's spread and raised worries about its impact on the region's nascent economic recovery.

The broad STOXX Europe 600 index fell 1.15%.

The dollar's gains were limited as investors looked ahead to the non-farm payrolls report due on Friday for the state of U.S. employment in November.

Wall Street economists estimate the U.S. economy created 550,000 new jobs last month, a Reuters poll showed.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.096% to 96.142. The euro was down 0.19% at $1.1298, while the yen traded up 0.36% at $113.1600.

U.S. Treasury yields edged up as investors returned to riskier assets, with 10-year Treasury notes rising 1.5 basis points to 1.449%.

The 10-year TIPS breakeven rate was last at 2.479%, indicating the market sees inflation averaging about 2.48% annually for the next decade, or lower than recent expectations.

Federal Reserve officials have been talking up a quicker end to the U.S. central bank's massive bond purchases as signs of faster inflation appeared.

Federal Reserve Bank of Atlanta President Raphael Bostic told the Reuters Next conference on Thursday it would be appropriate to conclude the tapering of bond-buying by the end of the first quarter of 2022.

"There are two camps in the market," Chandler said. "One camp agrees that inflation is out of control, but the other camp thinks that inflation is going to be temporary."

Oil prices settled higher after a see-saw session in which benchmarks swung in a $5 range after the Organization of the Petroleum Exporting Countries and allies surprised markets by sticking to plans to boost output slowly.

U.S. crude futures rose 93 cents to settle at $66.50 a barrel, while Brent oil futures settled up 80 cents to $69.67 a barrel.

© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

Gold dropped over 1% to a one-month low as investors latched on to the Fed's plans to tighten monetary policy more quickly than expected to rein in rising consumer prices.

U.S. gold futures settled down 1.2% at $1,762.70 an ounce.

Latest comments

covid loss of smell additive was created in a lab
otherwise, common flu
I see the rabid antivaccer lessko is still parroting his misinformation, half truths, and lies that he gleans from the unvaccinated fanatics on social media. it's simple, get vaccinated and the likely hood of serious illness, injury, or Death to you, your family and friends, are at a minimum.
get the jab and you'll clot
How much water they trying to get out of that Omicron pebble. What a joke of negative market news.
another robert whistling past the grave yard...
robert sharp sounds like a man whistling past the grave yard...there isn't enough data to determine what we are up against.
sheep
there's that word jitters again, I guess you're suppose to be cautious, concerned, fearful, or whatever. I thought it was some kind of skin parasite.
Have yet to hear of even 1 patient with the omicron variant to be hospitalized.. even if there have been a few, if it were prevalent reuters would screem it from the roof tops to scare the bageezes out of everyone. I find it interesting that this article has no mention of severity of symptoms. To me that means things will quickly be back to business as usual. Powell on the other hand, we'll have to wait and see.
When the FED says “hey don’t worry about the markets” and then oil collapses 13.5% in a day, maybe you should worry about the markets. Big boys are selling every spike and you should too. Interest rates only have one direction to go from here.
There are many unknowns about omicron. For transmisability, will need to review south africa daily average cases over the next week. 3500 new cases wednesdag and expodential growth is certainly concering for an area recently hit with delta and presumed immunity from that. Omicron does not appear more virulent than delta but further data needed. Seems like vaccines protect but how effectively? Will likey be more of a scare than anything but the next few weeks will be telling.
or...it could hit -150$ on the futures market
For over 21 months now the population has PRACTICED 4 anti-Covid techniques, yet the incompetent governments around the world give the foot draggers credit as if they deserved it. -- Cleverly, the market plays along as if the foot draggers were so ubiquitous that humanity were endangered because people refuse to protect against Covid. Ha Ha Ha
Anyway, I am still in Hang Seng, buy at dips, it's going to be a good 2022 for Asia, East Asia, South East Asia. we will see.
There are a few factors that US is causing all these fears in financial markets, interest rates increase, Covid-19, Omicron, Delta etc.... In the past one year or so, China have been selling USD Bonds for awhile & thus the RMB is gaining ground. This is worrying for US as China started reducing her holdings in US debts. And some countries started doing direct currency swabs with China, by-passing the USD exchange rate on a fixed rate basis. There is also quite a handful of China Chinese buyers of properties in some western countries, causing uneasiness & unhappy foreign counterparts having China Chinese owning their properties. These are a few factors the western world is retaliating against China Chinese, well, you win some, you loose some, but  for the western world they just can't take loosing with openness. That's all. More new damages will come out with no end, until both US & China really sit down for a good mutual discussion again. It's going to take a long long time. lol
please stop the fear and lies. you and the market makers work together to cause mass selloffs where your positioned to win
Stop these lies. Markets are being manipulated by institutions and key players. The new variant symptoms are mild as confirmed by doctors.
buy buy buy my friend
Oh please..gtf over it. The variant is rare and mild, and we all knew the fed rate hike was coming.
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