Investors are looking on the bright side, after several studies reported milder symptoms from the new variant, while a third dose of vaccine is said to provide a high level of protection.

This week, the focus will be on central banks, with the Bank of England due to start its two-day meeting on Wednesday. Some expect that it will announce an interest rate hike as inflation soars, but other believe that the BoE missed its window of opportunity last month to make such a move, and that the arrival of Omicron has changed things.

The US Fed is also expected to take monetary policy decisions this week, with a possible interest rate hike. It will also decide how fast it will reduce its asset purchases. This comes after Friday’s US inflation number, which weren’t as high as Wall Street feared.

Sentiment was also boosted this morning by rumours that China is planning further fiscal stimulus to boost its economy.

After Boris Johnson said yesterday that we must prepare for a tidal wave of Omicron cases and that two vaccine doses will not be enough to contain its spread, Wizz Air fell 1%. Purplebricks Group dropped 13.9% after it decided to postpone it interim results and warned of a potential financial risk due to communications problems with tenants about deposit registrations.

 

Things to read today:

Buybacks Hit Record After Pulling Back in 2020 (Wall Street Journal)

El-Erian Says Transitory Inflation Call Was Likely Fed’s Worst Ever (Bloomberg)

US small-cap stocks trade at historic discount to corporate titans (Financial Times)