Investment Institute
Monthly Market Update

December Global Macro Monthly - Omicron – the ghost of Christmas past?

  • 17 December 2021 (10 min read)

Key points

  • The Omicron variant presents a new and as yet undefined risk to the growth outlook for 2022. Evidence on the severity of infections will define the likely growth impact.
  • Despite growth softening with supply constraints, the outlook for next year should be for further solid recovery. Inflation continues to rise but should be close to a peak in several jurisdictions.
  • Labour market differences will shape medium-term inflation risks. Tight labour markets in the UK and Canada make the Bank of England and Bank of Canada look likely early tighteners. The Federal Reserve is tapering more quickly and can tighten earlier in 2022. The European Central Bank has announced its own taper for 2022.
  • Rates and credit markets are positioned for faster Fed rate tightening, while the dollar could benefit further. ECB-Fed rate divergence poses some risk to European equity risk premia, but we remain constructive in outlook.

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    Disclaimer

    This website is published by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation or particular needs of any particular person and may be subject to change without notice. Please consult your financial or other professional advisers before making any investment decision.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.

    Some of the Services and/or products may not be available for offer to retail investors.

    This publication has not been reviewed by the Monetary Authority of Singapore.