US markets were stronger in the month. With the Dow Jones up +5.4% and S&P500 gaining +4.4% to finish 2021 nearly +27% higher. Its biggest annual percentage gain since 2019 and its third straight positive year. Sentiment improved as a trio of studies found that the Omicron variant led to lower hospitalisation risk than the Delta strain. And Pfizer Inc’s and Merck & Co’s Covid-19 pill gained clearance for emergency use in the U.S.
Long-dated U.S. treasury yields were higher, with the 2-Yr yield at 0.73% and 10-Yr yield lower at 1.51%.
EUROPEAN MARKETS
European markets gained with the Stoxx Europe 600 gaining +5.4% and ending 2021 up +22% to cinch a seventh consecutive quarter of gains, the longest winning streak since 1998, whilst the UK FTSE was up 4.6% and German DAX up +5.2%.
ASIAN MARKETS
Asian markets were higher, with the Shanghai Composite rising +2.1%. As sentiment was boosted after PBOC vowed to maintain stable monetary policy in 2022 and provide sufficient liquidity for the market. The finance ministry also announced it would proactively roll-out fiscal policies to stabilise growth. With greater cuts in taxes and fees planned for 2022 and State Council announced China will extend some personal income ta cuts over two years, cutting personal income taxes by 110bn yuan n 20-22 and 2023. The Nikkei was up +3.5% and KOSPI up +4.9%
COMMODITIES
Over the month, WTI oil price gained +14.2% to US$75.21bbl. As declining U.S. crude stockpiles, an energy crunch in Europe and disruptions to supply from Libya and Nigeria added to bullish sentiment. OPEC+ proceeded with their scheduled oil-production hike of 400k barrels a day of crude in January and approved a 400k barrel-a-day increase in production scheduled for February. However, with a surplus of 1.4m barrels a day in 1Q22, about 25% less than it estimated a month ago.
