CORPORATE AND INSTITUTIONAL

Bond yields retreated at the end of last week even though the assumption remains that the Fed will signal a March hike.

RBA to end QE in February while forecasts suggest Omicron is set to peak, adding greater inflation risk.

Latest flurry ahead of January 25-26 FOMC suggests March rates lift off expected.

AUD/USD made its low point for the year on Dec.3 at 0.6993 – the pair’s only foray below 0.7000 in 2021.

US and EU equities rebound overnight with mostly positive Omicron news lifting sentiment while company specific news have also helped the cause.

Commodity market news overnight is a fresh surge in European gas prices

Expect a cautious start to the week with the Netherlands going into lockdown on Sunday

For Australia the Q3 national accounts showed a smaller hit to activity than we had expected but we continue to see a very strong snap back in activity in Q4. Globally, advanced economy growth was robust in Q3, and a similar outcome is expected in Q4 albeit with a shift in the source of growth away from Europe towards the US and Japan.

Against the consensus view for an unchanged outcome, the BoE unexpectedly also raised rates by 15bps to 0.25%.

Our latest data for the fortnight to 11 November shows retail pulling back somewhat, following what looks to be a Black Friday – Cyber Monday surge two weeks ago.

Global recovery continues but inflation is high and Omicron a concern.

November data show little underlying improvement from October’s weakness.