Big Apple

A look at the day ahead from Sujata Rao.

A marked flattening in the U.S yield curve — with longer-dated borrowing costs taking a tumble — failed to lift tech shares on Monday. Instead, as the Omicron COVID variant gathered steam, consumer staples, pharmas and other defensives benefited, balking Apple of a $3 trillion market capitalisation.

With Wall Street futures pointing higher, and Apple’s Frankfurt-listed shares up almost 1%, Tuesday may well be the day the milestone is hit. read more

But in a week heavy with central bank meetings, data and expectations of hawkish policy turns, it’s anyone’s guess how market moves pan out.

Meanwhile, the Bank of England’s dilemma — to hike or not to hike — hasn’t gone away. November’s payrolls increase was the biggest since tax office records began in 2014, showing labour markets have withstood the end of a furlough scheme.

Online supermarket Ocado also provided a snapshot of the UK jobs market with a 3.9% fall in quarterly sales, due to labour shortages. read more

But with the spread of Omicron triggering work-from-home advice and other restrictions, the BoE may well choose to hold fire on Thursday read more .

Watch too for U.S. factory gate prices — a reliable forward indicator for CPI — out later on. Having started the year below 2%, November PPI will be above 9%, polls predict.

That data is unlikely to shake conviction the Federal Reserve, starting its two-day meeting on Tuesday, will accelerate its stimulus tapering and that the dot-plot chart of rate-setters voting intentions will show a more hawkish turn compared to the last meeting.

That’s keeping the dollar index at one week-highs and equity futures are higher. For now, let’s focus on emerging markets, where the rate hiking campaign continues unabated — Hungary is expected to raise rates by 30 basis points and Chile by as much as 125 bps. read more

Key developments that should provide more direction to markets on Tuesday:

-OPEC upbeat on 2022 oil demand, says Omicron impact to be mild read more

-Musk sells Tesla shares worth $906.5 million read more

-Euro zone industrial production November

-Germany’s Ifo Institute economic outlook

-Europe earnings: Ocado, Purple BricksReporting by Sujata Rao; editing by Dhara Ranasinghe

Our Standards: The Thomson Reuters Trust Principles.

This article was originally published by Reuters.