Investors believe coronavirus has become less dangerous - 29.12.2021

On Tuesday, the US dollar index rose slightly. For the 6th week, it has been trading in a narrow range of about 96 points. Investors expect the Fed rate to rise (0.25%) in 2022. Thanks to this, the US dollar index demonstrates in 2021 the maximum increase since 2015, which is now 6.6%. There was no significant macroeconomic data in the US yesterday. In Japan, the preliminary indicator Industrial Production for November (+ 7.2% m/m) was published, which unexpectedly far exceeded the forecast (-0.5% m/m). This slightly strengthened the yen rate.

Bitcoin and Ethereum fell by about 6% on Tuesday. Miners are likely to get rid of the available coins at the end of the year. The leadership of almost all countries with the most developed cryptocurrency mining, such as Russia, Kazakhstan, Iran, China, declare an inevitable increase in the cost of electricity for miners. Meanwhile, Bitcoin quotes are now 77% higher than the level at the beginning of the year and Ethereum - by 420%. This creates the prerequisites for fixing profits.

Yesterday, US stock indices dropped slightly after a strong 4-day advance. The S&P 500 has renewed its all-time high, but failed to gain a foothold above the psychological level of 4800 points. Investors probably do not expect a rapid decline in inflation in the US (+ 6.8% y/y in November). Therefore, there was good demand for the shares of retail and pharmacy chains Walmart (+ 1.4%), Kroger (+ 1.5%), Walgreens Boots Alliance (+ 1.4%), as well as food manufacturers ConAgra Foods (+ 1.6% ), Campbell Soup (+ 2.8%) and utilities Exelon (+ 1.5%), American Water Works (+ 1.4%). At the same time, on Tuesday, shares of manufacturers of microcircuits and computer chips corrected downward: NVIDIA (-2%), Applied Materials (-1.9%), Micron (-1.6%), Microchip (-1.6%). They have grown a lot during the previous 3-4 months. Most likely, market participants are counting on the end of the global shortage of microcircuits early next year. Economic data on Pending Home Sales for November, as well as Goods Trade Balance and Retail Inventories, are due in the US today.

On Tuesday, oil rose in price. However, Brent was unable to immediately overcome the psychological level of $80 per barrel and now there is a consolidation of quotations. The independent American Petroleum Institute announced a decline in US oil reserves for the week by 3.09 million barrels. This has happened for the 5th week in a row. Investors believe that global oil demand will continue to grow faster than the increase in its production. On January 4, OPEC + will increase production by another 400 thousand barrels per day (bpd). The number of patients with coronavirus has been increasing in recent days. So far, however, the new Omicron strain is believed to be much less dangerous than Delta and other strains. Russian Deputy Prime Minister Alexander Novak said that global oil demand in 2021 increased by about 5 million bpd and could increase by 4 million bpd in 2022. At the same time, the level of oil prices should be in the range of $65-80 per barrel. Under such conditions, Russia can reach the pre-pandemic level of oil and gas condensate production of 11.33 million bpd in May.