Squawk Box Europe Express

The UK announces the rollout of third doses of the Covid vaccine to all over 18s by the end of the month as Prime Minister Boris Johnson warns of a ‘tidal wave’ of the omicron Covid variant around the corner. In the US, scores of people are thought to have been killed as a cluster of tornadoes rampages through 6 states. Meanwhile, inflation in the U.S reaches its highest level since 1982. And, a court in Madrid orders Santander to pay the boss of Unicredit 68 million dollars for withdrawing its offer of CEO in 2018.  

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Inflation is expected to rise 6.7 percent in the U.S, pushing the FED to act faster. Meanwhile, tech stocks lead the losses in the Asia and U.S markets. The U.S is expected to blacklist the Chinese AI firm, Sensetime, while also recording the lowest jobless claims in 52 years. Daimler prepares to list in Frankfurt this morning and aims for 60% of their production to be of electric vehicles.

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U.S. pharma giant Pfizer says that its Covid vaccine provides cover for the Omicron variant but that a third and fourth dose would work best. In the UK, Prime Minister Boris Johnson announces ‘Plan B’ to slow the spread of the new variant with work-from-home guidance in England, masks and vaccine certification for some venues. Chinese consumer inflation surges at its fastest pace in over a year due to rising food costs but factory gate price growth slows. And the U.S. Department of Justice warns Deutsche Bank it may have violated the terms of its criminal settlement.

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U.S. markets surge with the Nasdaq enjoying its best session since March, and Asian equities also climb on diminishing fears of the Omicron variant. U.S. President Joe Biden holds a two-hour video call with his Russian counterpart Vladimir Putin, warning him of potential economic sanctions should he invade Ukraine. Evergrande’s shares hit a record low as the developer reportedly misses an offshore debt payment deadline. And Nestlé announces plans to sell back $10bn worth of L’Oréal shares to the cosmetics company.   

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Surging costs, supply chain disruption and a strong yuan combine to slow China’s November export growth. Troubled Chinese property giant Evergrande appears on the verge of bankruptcy with some foreign bondholders reportedly not receiving payments. We hear from IMF Managing Director, Kristalina Georgieva, who says that the fund may downgrade eurozone growth forecasts due to the Omicron variant restrictions and high inflation. In the U.S. the Dow claws back last week’s losses as investors shrug off Omicron concerns. And tensions between Washington and Beijing increase after the U.S. announces a diplomatic boycott of the Winter Olympics citing human rights concerns.

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Equity markets shrug off a disappointing November jobs report and renewed Covid concerns, while early research out of South Africa shows Omicron hospitalisations have not increased. As European nations broaden restrictions to fight the pandemic, protests erupt in Brussels, the Netherlands and in Catalonia. In France, Les Républicains party selects Valérie Pécresse to contest the presidency next year. Oil prices kick off the week in the green after Saudi Arabia hikes selling prices to Asian countries and the U.S., following six consecutive weeks of declines. And, beleaguered Chinese property giant Evergrande sees shares tumble as it faces another default deadline today, and warns funds are running low.

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The Dow surges by more than 600 points following the Omicron sell-off, however futures are down ahead of the November U.S. jobs report. Opec+ countries say that they will consider cutting supply ahead of schedule should a new pandemic surge hit demand. The announcement comes after a 400k bpd increase was promised last month. Chinese ride-hailing firm Didi is to delist from the NYSE and move to Hong Kong after Chinese regulators reportedly warned U.S.-listed firms over data security. China sees its services sector expanding at a slower pace in November, hindered by inflationary pressures and Covid. And in Europe, Brussels has said that the Omicron will become the dominant strain on the continent within months, while Germany is considering forced vaccinations.     

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In another turbulent trading session, Wall Street swings sharply lower on the news that the first case of the Omicron variant in the U.S. had been discovered in California. Oil prices surge with investors anticipating a decision to slow down supply from OPEC+ members as the new Covid variant is predicted to take its toll on demand. In Turkey, finance minister Lutfi Elvan resigns and is replaced by an Erdogan loyalist keen on cutting rates amid soaring inflation and a tumbling lira. Meanwhile, Apple suppliers in Asia see stocks dip after the tech giant reports that iPhone demand has slowed due to wait times associated with the chip crisis.  

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U.S. Federal Reserve Chairman Jerome Powell says it is time to retire the expression ‘transitory inflation’, insisting it has been more persistent than first thought. He also adopted a hawkish tone about tapering. Oil prices claw back some of Tuesday’s losses ahead of two days of OPEC output strategy talks. Swiss lender UBS names Sarah Youngwood as its new CFO following the departure of Kirt Gardner. In China, factory activity for the month of November has returned to contractionary territory on the back of slowing demand and rising prices. Meanwhile, France posts its highest number of Covid cases since April as the Omicron variant continues to spread across the continent.  

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The CEO of vaccine maker Moderna, Stephane Bancel, casts doubt over the efficacy of existing jabs against Omicron, prompting U.S. futures and the Nikkei to turn red. Oil also dips on the news, but U.S. energy envoy Amos Hochstein tells CNBC in an exclusive interview that the Biden administration is ready to release more special petroleum reserves if need be. As more countries weigh their measures to combat the new variant, the UK widens its Covid booster programme to all those aged over 18. Meanwhile, U.S. President Joe Biden rules out lockdowns following the discovery of Omicron, saying travel restrictions will only help to slow the spread of the variant. And in China, manufacturing grows for the first time in three months following a fall in prices and an easing of supply chain pressures.

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