Waiting for the Fed now

The equity markets have gone back down, bond yields have eased a bit and the dollar has strengthened a bit. This is the result of a mixture of concern about the Omicron variant and, above all, of caution before the central bank meetings, the Fed’s in particular.

Regarding Omicron, the British authorities are making catastrophic forecasts that seem to be disconnected from the conclusions of studies conducted in South Africa. A first case has also emerged in China, fuelling fears of further major restrictive measures that would prolong global supply problems. As for the Fed, the consensus on a scheduled end to asset purchases at the end of March rather than at the end of June seems to be well established, but the markets are playing it safe.

After the UK jobs market and the expected rebound in euro zone industrial production in October, two interesting reports will be released this afternoon in the US: the NFIB small business survey and producer prices.

But overall, the markets should not move too much before the Fed meeting tomorrow.