Pessimistic on Europe? Try shorting the Swedish crown

from Forex News https://www.investing.com/news/economy/pessimistic-on-europe-try-shorting-the-swedish-crown-2697579
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US Open – Claims better again and OPEC increases production

USOil, H1

Initial claims bounced 28k to a lean 222k in the final week of the month, hence trimming last week’s -76k plunge to a 52-year low of 194k (was 1,99k), while continuing claims fell -107k to a 1,956 new cycle-low, after a -46k drop to 2.063m (was 2.049m) prior cycle-low. The insured jobless rate fell to a 1.4% new cycle-low from a 1.5% prior low, versus a pre-pandemic 1.2% reading in March of 2020, and a 1.1% all-time low in April of 2019. Initial claims are averaging 238k in November, versus 285k in October and 341k in September. The 270k BLS survey week reading undershot recent survey week readings of 291k in October and 351k in September. Continuing claims fell -176k between the October and November BLS survey weeks, after drops of -572k in October, -97k in September, and -388k in August. Claims have tightened dramatically since September, though gyrations over the last two weeks have also reflected holiday volatility, which usually starts with the Veteran’s Day holiday and extends through the MLK week.

USOil was smashed down to three-plus month lows of $62.48, down from $65.92 at the open, and $67.15 overnight highs. Earlier headlines indicated OPEC+ ended its meeting with no decision made to increases production, though recent Bloomberg headlines said Russia proposes increasing output by the previously agreed 400k bpd. The front-month contract has since recovered to $64.00. A move under the August 23 low of $61.74 would take prices to levels last seen in May.

Click here to access our Economic Calendar

Stuart Cowell  

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /291771/
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Strong NFP won’t help USD to rise

The news flow concerning the new covid strain continues to keep investors in suspense, with the VIX trading at its highest level since May 2020 (28-30 points):The bullish rebound in EURUSD fizzled out near 1.14 level thanks to Powell's hawkish comments and better-than-expect US eco data. A solid NFP report for November is needed to keep bearish sentiment in check as negative economic consequences from the spread of the new strain remains major risk.Yesterday the markets priced in the news that Omicron was identified in the US, which was characterized by elevated market volatility. There was also good news, though: GlaxoSmithKline reported that the company's antibody treatment is effective against the new strain, as suggested by early trials. Very encouraging news for the market was the statement of the WHO that existing vaccines will likely protect against severe course of the disease which obviously bodes well regarding to hospitalization rates in case of the spread of the new strain. Also, the head of the Australian Ministry of Health said there are no evidence that omicron leads to more hospitalizations and this implies lowered risk of social curbs imposed by the governments.The big uncertainty for commodity currencies will be the OPEC meeting tomorrow, at which the issue of a planned production hike will be decided. However, due to heightened pandemic risks, market participants also consider the possibility that OPEC will cut production in order to balance demand risks. Thanks to these expectations, oil quotes are regaining their decline, however, the optimism is rather moderate, as the baseline scenario remains the extension of the existing production quotas. In the event of a production cut, WTI could easily rise above $70 a barrel.European markets again go on the defensive today, the fall of the main indices has exceeded 1%, futures for US indices nevertheless maintain positive dynamics and trade in green expecting continuation of strong economic prints from the US, including labor market data.The ADP report beat forecast yesterday (534K vs.520K forecast) while the manufacturing PMI in the US showed that the sector maintained high rate of expansion in November. Before the release of the NFP, the dollar index will probably continue to consolidate around the 96-point mark, and the EURUSD will not be able to overcome the formed resistance at 1.1350-1.1360. However, towards the end of the year, seasonally weak USD may help USD to recover further potentially challenging 1.16 resistance level: Import factor for this will be the ECB stance especially its reaction function against increasing inflation pressures as shown in the latest bunch of inflation data (German CPI beat, EU CPI beat).

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/strong-nfp-wont-help-usd-to-rise"
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Market Spotlight: OPEC Meeting In Focus

OPEC Up NextThe big focus for markets today, away from any Omicron updates, is the OPEC+ meeting taking place in Algeria. The meeting has been called in order for OPEC and a group of non-OPEC producer nations led by Russia to discuss how the Omicron variant is likely to impact oil demand and oil prices, as well as making a decision on oil output levels going forward.Over recent months, OPEC has been steadfastly committed to maintaining a gradual increase in production levels. Indeed, over the last month the group has resisted calls from president Biden to step up production in order to bring oil prices down amidst the energy crisis.However, in light of the more than 20% correction we have just seen in oil prices the focus now is on whether there is any sign that OPEC might actual scale production back once again, in a bid to boost prices. If OPEC keeps output at current levels, this will likely be oil negative in the near term (focus remains on Omicron), if they hike oil output, this will be oil negative too. However, if they surprise by scaling back, this would take markets by surprise, fuelling a rally in oil prices.Technical ViewsCrude OilThe slide in oil prices have taken the market down to support at the 65.52 level. Any disappointment from today’s meeting or dire warnings over Omicron could easily fuel a move lower towards 60.55 next. On the upside, any surprise cut in production would likely see the market retesting the broken bull channel low and 74.46 level above.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-opec-meeting-in-focus"
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UK BOE Rate Hike Expectations Fall Further

Bailey Warns Of Residual RisksExpectations that the Bank of England will hike in interest rates before the year end seemed to take another knock yesterday. Speaking at a business conference in London yesterday, the BOE governor warned over the continued economic risks around COVID. Bailey kicked off the speech by praising the recovery so far, saying: "Direct economic effects of COVID have attenuated a lot since the fall in GDP in the second quarter of last year, when we went off a cliff.” However, the BOE chief went on to warn that “there are still impacts that we are feeling from COVID quite strongly." Bailey went on to add that "Even now, services are recovering but we have still got quite a long way to go. That has put quite a strain on supply chains around the world."Awaiting Further Omicron DetailsWhile the BOE stopped short of commenting on the new variant, the uncertainty around the new variant has made itself very clear in price action over the last week. UK asset prices, along with the broader risk complex, tanked in response to news of the variant. However, we are seeing some recovery activity this week. The real catalyst, however, is likely to be once we start to get some better details on the severity of the new strain.Falling Rate Hike ExpectationsIn the UK, government health officials have warned that they are likely to have a proper idea of the seriousness of Omicron over the next few days to few weeks. If they announce that the virus is not as concerning as first thought, this will likely see a sharp rebound in risk sentiment, putting a December BOE rate hike firmly back on the table. However, if the new strain is deemed to be a bigger threat than previous strains, this will likely see the BOE relegated to the side lines in December while it waits to see what course the government takes and what impact it has on the economy. Currently, pricing for a December hike is sitting at around two-thirds, down from around three-quarters before Omicron was announced. So, there is still a decent level of expectation that the BOE will hike.Technical ViewsGBPUSDGBPUSD continues to languish at the bottom of the bear channel following the recent break below the 1.3349 level. While the focus is still on further downside for now, the latest leg of the decline can be seen as a falling wedge pattern, flagging potential upside risks. This view is further supported by bullish divergence in momentum studies. Should we see an upside break, the 1.3349, 1.3461 and 1.3570 levels are the key upside markers to note.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/uk-boe-rate-hike-expectations-fall-further"
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Is the bull market over, or is this a short-term pullback?

Stockmarkets have had a bit of a swoon recently as the Omicron variant spreads around the world. But is this just a market tantrum, asks Dominic Frisby, or the beginning of a crash?

from Moneyweek RSS Feed https://moneyweek.com/investments/stockmarkets/604193/is-the-bull-market-over-or-is-this-a-short-term-pullback
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Hong Kong's departing residents withdrew $334 million in pension funds in Q3

from Forex News https://www.investing.com/news/forex-news/hong-kongs-departing-residents-withdrew-334-million-in-pension-funds-in-q3-2697095
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The Crude Chronicles - Episode 115

Oil Traders Cut LongsThe latest CFTC COT institutional positioning report shows that oil traders cut their net long positions again last week with the total upside position now sitting around one year lows. The sell off comes amidst the ongoing uptick in the US Dollar and renewed fears around COVID as a result of the identification of a new variant, Omicron.OPEC In FocusOil prices are now sitting down by more than 20% from the highs printed in October. Given the sell off, there is a high level of speculation around how OPEC will react. Recently, in response to the US continuing to release oil from the government’s SPR, OPEC had warned that it might look to cut back on production levels in a bid to boost oil prices. Given the heavy sell off over the last week as Omicron fears have taken hold, the market is now expecting such an announcement from the meetings which are taking place later today.Omicron ImpactAlong with the decision on oil production levels, the market will also be keen to hear the group’s latest outlook in light of the new variant. Oil prices came under immediate and heavy selling pressure as news of the variant first broken, echoing the early days of the pandemic last year. While the broader market response appears to have calmed down for now, as we await further details on the severity of the strain, oil prices remain under pressure. At the very least, the immediate disruption to travel (fresh airline restrictions announced globally and the expectation of lower demand over the holiday season from the aviation sector, means that oil is likely to remain pressured near term.EIA Reports Crude Inventories DrawThere was some good news for crude bulls this week, however. The EIA reported that US commercial crude inventories were lower by almost a million barrels last week, following the unexpected surplus of the prior week. However, the decline was a little less than forecast and was accompanied by news that both gasoline and distillate stockpiles were higher over the week, reflecting a drop in demand.Technical Views Crude OilThe reversal lower from the failure at 83.75 level has seen the market breaking down through several key levels as well as the bull channel low. Price is currently sitting on the 65.52 level support. However, with both MACD and RSI firmly bearish here, the focus is on a continuation lower towards the 60.55 level next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/the-crude-chronicles-episode-115"
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Investment Bank Outlook 02-12-2021

CIBCKey Headlines Bounce in the US equity futures, optimism is back, Moderna could have a COVID-19 booster shot targeting the omicron variant tested and ready to file for US authorization as soon as March.FX Flows$Yen advanced towards 113.00, I thought it was demand for the Tokyo fix but it wasn’t. Apparent buying came from the retail day traders, putting on long USD positions. Exporters capped the $Yen at 113.00 but gave way. There is also talks of large 113.00 option strikes due on Friday for $1.05bn.Risk sentiment pushed €Yen higher thus helped the EUR$. There is a chatter from overnight that offers above 1.1350, I was told some of them came from IMM-type of accounts, probably trying to reduce longs. Policy divergence between Fed and ECB, leveraged accounts will be looking to sell on rally, real money guys are buying dips. I suspect bids should come in around 1.1290.Not an exciting session for the A$ and N$. Australia’s October trade surplus at A$11.22bn, pretty much in line with forecasts. However, exports fell -3% against estimates of -1%; imports -3% against +2% and iron ore exports fell 26.8%. 2-year yield spreads of AU-NZ bonds widened, at one point rose about 123 bps but no reaction in the cross.CitiEuropean OpenIt seems like the market is getting a breather this Thursday morning in what could be the eye of the storm. Following the first case of the Omicron variant being identified in the US yesterday, markets had taken a huge risk-off swing, with equities down sharply and UST rallying sharply. Asset markets staged a partial rebound during Asia hours with Treasury yields higher by 3-4bps across the curve and S&P e-minis climbing 0.6%. In keeping with these moves, JPY was down slightly, while oil prices were up over 1%. NOK was a notable exception to the rule, however, ticking lower as a result of flows. EM mostly saw capital flows driving the currencies, with our eTraders seeing volumes a tad lower through the day.Looking forward to today’s events - the OPEC+ meeting presents the largest event risk, with a consensus expecting a variation from the planned 400k bpd increase. We also see some US data in the form of Initial Jobless Claims & Continuing Claims at 13:30 GMT. Fedspeak will be in the limelight as usual ahead of the blackout. We see Bostic at 13:30 GMT, Quarles (departing thoughts) at 16:00 GMT, Bostic again at 16:30 GMT and we end with Daly and Barkin at 16:30 GMT. HUF will see a live central bank meeting, in which the market expects a 15bps hike to 3.05%, while BRL sights GDP data at 12:00 GMT.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-02-12-2021"
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Daily Market Outlook, December 2, 2021

Daily Market Outlook, December 2, 2021 Overnight Headlines US Health Officials Find First Us Case Of Omicron Variant In California US Shutdown Risk Rises As Congress Stalls On Stopgap Spending Bill Fed's Mester Open To Faster Taper To Win Space For Rate Hike US Delaying End To UK Metals Tariffs Over Northern Ireland Standoff Germany Government To Tighten Coronavirus Restrictions: Politico China, US Set For Meeting Of Military Officials Amid Taiwan Tensions BoJ's Suzuki: To Seek Ways To Mitigate Cost Of Monetary Easing Asian Equity Markets Mixed As Omicron Worries Leave Investors On Edge Oil Rises As Investors Focus On OPEC+ Decision Amid Omicron Fears Turkish Lira Drops Anew After Erdogan Replaces Finance Chief Apple Tells Suppliers iPhone Demand Has Slowed As Holidays Near The Day Ahead Asian equity markets are mixed this morning as concerns about the potential impact of the Covid omicron variant remains the dominant issue. The WHO has said that vaccines should offer protection against the variant. The first US omicron case has been detected in California. European Commission President Ursula von der Leyen said that EU countries should debate making Covid vaccines compulsory. Media reports suggest that the Liberal Democrats have scaled back campaigning to enhance the chances of Labour causing an upset in today’s UK parliamentary by-election for a seat currently held by the Conservatives. From a high of 8.6% in the autumn of 2020, the Eurozone unemployment rate had fallen to 7.4% by September and the consensus forecast is for a further decline to 7.3% in October. That is a signal that the labour market has been improving but it is unclear whether the downtrend will continue given signs that growth is now slowing. Meanwhile, following the report of higher-than-expected consumer price inflation in November, the producer price report is expected to point to further rises in the pipeline. In the US ahead of tomorrow’s labour market report for November, weekly unemployment claims data will provide a timely update on conditions. New claims have been dropping sharply in recent weeks and last week’s outturn was the lowest for several decades. That probably was due in part to seasonal adjustment issues and so this week will probably see a partial rebound. Nevertheless, the data seem to be further confirmation that, after having slowed last quarter, the US economy’s rebound has picked up again in Q4. Of course, a big question is whether the new Covid variant will disrupt this. Federal Reserve Chair Powell’s testimony to Congress yesterday seemed to confirm Tuesday’s message that the tapering of the asset purchase programme would be accelerated at its 15th December meeting. In contrast, Bank of England Governor Bailey provided no indication whether the BoE will raise interest rates the following day (16th December) in remarks yesterday. There are no scheduled BoE speakers today. The next one up is Michael Saunders tomorrow. He was one of the policymakers who voted for a rate rise in November. However, there are several scheduled speeches from Federal Reserve policymakers. Attention is likely to be principally focused on whether they seem to be supportive of accelerating the pace of tapering and any caveats they may mention such as linking the move to Covid trends and/or any upcoming data releases. Government bond yields have continued to trade erratically as markets remain uncertain about the implications of omicron. US Treasury yields have rebounded overnight after edging down yesterday despite Powell’s comments.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )USDJPY - 115.00 1.69bn (1.33bn C). 114.50 705m. 114.20/30 510m. 114.00 1.18bn (827m C). 113.60/70 1.57bn (914m P). 112.50 755m. 112.20 574m. 111.80 574m. 110.70/80 798m. 110.00 440m.EURUSD - 1.1470/80 618m. 1.1440/50 1.21bn (610m P). 1.1420/30 1.14bn (621m P). 1.1370 465m. 1.1340/50 403m. 1.1270/80 822m. 1.1240/50 416m. 1.1210 449m.GBPUSD - 1.3300 851m.AUDUSD - 0.7280/0.7300 857m.EURNOK - 9.86 811m.USDZAR - 15.80 500m.USDMXN - 21.50 1.51bn (1.34bn C).Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above EUR/USD opened -0.15% at 1.1320 after easing during US session It traded to 1.1315 early Asia before steading moving higher EUR/JPY buying helped to underpin and it traded to 1.1339 Heading into the afternoon it is steady around 1.1335 Resistance is at 21-day MA at 1.1372 and break would suggest bottom in place Support is at the 10-day MA at 1.1278 with bids ahead of 1.1300 EUR/USD resilient, but ECB/Fed divergence likely to weigh at some stageGBPUSD Bias: Bearish below 1.36 Bullish above. GBP better bid in Asia, GBP/JPY leads, JPY safe haven plays abating? GBP/JPY from 149.58 very early Asia to 150.45, steadies near high On hold for now below 150.50 base of hourly Ichi cloud, 150.51 hourly kijun Descending 55-HMA in hourly Ichi cloud at 150.62 GBP/USD from 1.3263 very early Asia to 1.3305 Resistance from 1.3307 hourly Ichi kijun, 55/100-HMAs 1.3308/15 above Descending 200-HMA 1.3346, extent of any more upside? Cable holding for now near GBP851 mln option expiries today at 1.3300 Jury still out on BoE rate hike this month, Omicron concerns stillUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY and the JPY crosses bid in Asia again, Japanese importers help USD/JPY from 112.63 early Asia to 113.10 top of daily Ichi cloud 113.13 Ichi hourly kijun, 113.19 descending 55-HMA, hourly Ichi cloud 113.24 Some offering interest noted 113.00, likely specs selling the rally Concerns still over Omicron, unease ahead of US NFP Friday, FOMC this month US yields soggy but off lows yesterday, Treasury 10s @1.431%, low o/n 1.402% Nearby option expiries - 112.25 $573 mln, 112.50 $755 mln, 113.60 $580 mln Tokyo still risk off, Nikkei -0.7% @27,750, E-Minis +0.6% @4537, AXJ mixed JPY crosses bid, EUR/JPY 127.71 to 128.20 EBS, AUD/JPY 80.04 to 80.49AUDUSD Bias: Bearish below 0.75 Bullish above AUD/USD plots a straight path to 0.7000 as US yields weigh AUD/USD follows bearish path lower, teasing bigger drop ahead 3-week slide neatly follows confines of Bollinger downtrend channel Ceiling of channel descends to now cap intraday at 0.7152 Closing below Aug low 0.7106 paves way toward 0.7000 psych barrier Near-term US Treasury yields rise again; curve flattens Powell's reiteration of hawkish pivot supports USD

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-december-2-2021"
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Dollar Stable as Traders Digest Omicron News; Rand, Aussie Dollar Hit

from Forex News https://www.investing.com/news/forex-news/dollar-stable-as-traders-digest-omicron-news-rand-aussie-dollar-hit-2696900
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Powell reiterates Hawkishness, First case of Omicron confirmed in US – Stocks tank again under key technical levels, Yields slip again, USD mixed. Erdogan sacks Fin Min – TRY new all-time lows, Apple iPhone 13 demand weakens, GSK ant-viral drug remains active vs. Omicron

• USD (USDIndex 96.08) rotates through 96.00 due to lack of firm data regarding Omicron, markets reamin on edge. Stocks fell significantly with USA100 down over -1.83% USA500 -1.18% (-54pts) 4513 (opened the day +1.1%) and broke 50-day MA first time since October 14 & USA30 off 461 pts and under 200-day MA first time since July 13 2020.
• US Yields 10-year rates were down over 7 bps to 1.40% before recovering to 1.434% now.  
• Asian Markets – Asian markets have traded mixed. Topix and Nikkei are down -0.5% and -0.7% respectively. The ASX lost -0.1%, but Hang Seng and CSI 300 are up 0.2% and 0.3%. Shenzen and Shanghai Comp are slightly lower though as officials seem eager to close a loophole used by tech firms to list abroad.
• USOil – continues under pressure, down to $64.50 yesterday – recovered to test $66.35 today – awaiting OPEC+ meeting later.
• Gold Up day yesterday but remains pressured testing $1775 now  
• FX markets – Yen rallied USDJPY dipped to 112.70, back to 113.31 now, EURUSD now 1.1312 & Cable pressured 1.3192 low yesterday – 1.3275 now. 

European Open – The 10-year Bund future is up 30 ticks, outperforming versus Treasuries, which remain pressured by the hawkish turn at the Fed. The 10-year Treasury yield has lifted 3.0 bp overnight, but at 1.43% remains far below the levels seen ahead of the Omicron scare, which the WHO seemed to try and play down somewhat. DAX and FTSE 100 down -1.1% and -0.9% respectively in catch up trade with the slide on Wall Street yesterday, while US futures have found a footing and are posting gains of around 0.6-0.8%.

Today – EZ Unemployment Rate, US Weekly Claims, Fed’s Bostic, Quarles, Daly, ECB’s Panetta, JMMC/OPEC+ meetings.

 

Biggest FX Mover @ (07:30 GMT) CADJPY (+0.77%) Risk-sensitive currencies remain volatile, from a slide to 87.85 yesterday, today a rally to 88.60. Currently MAs aligned higher, MACD signal line & histogram under 0 but rising, RSI 56 & rising, OB. H1 ATR 0.188, Daily 0.98.

Click here to access our Economic Calendar

Stuart Cowell  

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /291600/
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Russian Ruble Is on the Rise

Good day,Russian ruble underwent correction and approached the level of 74.00. Currently, it is trying to jump. In principle, the asset’s price might also drop till the supporting level of 73.50 and hit the level of 76.00.Brent oil tested the supporting level of 68.00 next to the broken downtrend. Oil is likely to target the level of 77.82 next.The EUR/USD pair should jump away from the downtrend to face the resistance at the level of 1.1525 and drop.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/russian-ruble-is-on-the-rise-02-12-2021"
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Short bets on Asian FX rise as Omicron uncertainty grips markets: Reuters poll

from Forex News https://www.investing.com/news/stock-market-news/short-bets-on-asian-fx-rise-as-omicron-uncertainty-grips-markets-reuters-poll-2696718
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