Sujata Rao gives a glimpse at what lies ahead.

Omicron is a concern for politicians, but stock markets keep moving higher. Wall Street’s Tuesday gains weren’t driven by lockdown beneficiaries, as is the case in tech. They were inspired by shares like Carnival (NYSE:). Expedia (NASDAQ:).

However, we appear to be heading for a more buoyant session with European shares moving higher after a strong Asian session and U.S. Futures looking south.

Markets may be already past Omicron’s impact and pinning hope on treatment such as the Pfizer (NYSE: Moderna (NASDAQ) The possibility of home treatment for COVID patients by pills. A second explanation is that the UK has promised to aid the hospitality industry. It expects not only central banks but governments as well as the government to support economies.

Particularly in Britain, the stakes are high. The third quarter GDP growth, pre-Omicron, was 1.1%. This is lower than originally thought. It is 1.5% less than the pre-pandemic level. More worryingly, Q3 investment in businesses fell 2.5% over last year.

Bull markets remain supported by money. There is plenty.

This can be seen in Tuesday’s record $1.75 Trillion at the Fed overnight repo facility. It shows the excessive reserves glut that pushed down the repo rate to 0.05% for only the second time since October.

For your reference, the overnight reverse repost demand in August was $1 trillion lower than it was in August.

In the meantime, action continues in emerging market.

Following the promises of currency loss compensation, the Turkish authorities have brought down the Turkish lira to record levels. This move will create problems over the coming months. JPMorgan (NYSE 🙂 for example, predicts that a 12% lira appreciation compared to lira rate increases the deficit by about 1% per month.

After November’s huge 125-bps jump, the Czech National Bank could raise rates by as many as 75 basis points later in the day.

World stocks have seen $10 trillion surge in value in 2021: https://fingfx.thomsonreuters.com/gfx/mkt/mypmnaejdvr/Pasted%20image%201640093340625.png

On Wednesday, key developments should give more direction to the markets:

Rates held at the -Thailand central banking

Meeting of the Monetary Policy Committee at the Czech National Bank

U.S. GDP Q3/Q3 corporate profits/consumer trust/existing home sales