Squawk Box Europe Express

The Netherlands becomes the first country in Europe to impose strict lockdown measures as the omicron variant spreads across the world. In London, the city mayor, Sadiq Khan, declares a major incident due to rising cases in the capital while the health secretary calls for more caution over Christmas. This comes as the UK sees around 22,000 new cases over the weekend. Meanwhile, the resignation of Lord Frost delivers another blow to the UK Prime Minister, Boris Johnson. Germany follows France and bans travelers from the UK while anti-lock down protests break out across the country.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Sterling rallies as the Bank of England hikes rates for the first time in 3 years, raising its benchmark rate to 0.25% in anticipation of inflation hitting 6% by April. Meanwhile, the ECB is set to exit its Pandemic Emergency Purchase Programme in March in order to stave off surging levels of inflation. The ECB also plans to raise its Asset Purchasing Programme from $20 billion to $40 billion in the second quarter, and to $30 billion in the third. As Hong Kong votes for its next legislative council this weekend, we speak to CNBC’s Emily Tan about the first Legco poll since China’s overhauling of the electoral process in the city earlier this year.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

The Federal Reserve slows the pace of its monthly bond purchases and signals three rate hikes next year. The FED says it will taper its bond purchasing programme by 30 billion dollars per month, putting it on pace to end its pandemic status by March. It intends to raise rates as many as 8 times by 2024 while keeping its fund rate at record lows. Meanwhile, the Bank of England’s Monetary Policy Committee will meet today to decide whether to increase interest rates and tighten conditions. This comes amid a recent inflation surge and deepening fears over the Omicron variant. We also look toward the ECB’s delivery of its latest policy decision amid challenges of soaring inflation and rising covid rates.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Producer prices in the U.S see the sharpest rise on record and has unsettled Wall Street before today’s FED decision. The U.S hikes the government debt ceiling to $31.4 trillion thus avoiding an historic default. Meanwhile, American investors will be banned from investing in another eight Chinese companies, including the world’s largest manufacturer of commercial drones, DJI.Chinese industrial output data beats expectations but Covid fears and restrictions mean sales still missed overall forecasts, slowing growth in October despite multiple headwinds from the PBOC. And, the IMF calls on the Bank of England to take action to curb inflation in its policy meeting tomorrow. This comes as the IMF anticipates inflation in Britain returning to its 2% target by 2024See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

As China records its first case of the omicron Covid variant, Beijing comes under pressure to reconsider its zero-tolerance approach to covid transmission. Tech and travel stocks lead the losses on Wall Street while omicron unnerves investors in Asian equities. The UK health secretary, Sajid Javid says the omicron variant could account for 44% of cases in London and is expected to be the dominant strain later today. Meanwhile, The Federal Reserve’s Federal Open Market Committee is expected to accelerate its bond purchasing programme today which could mean an earlier hike in interest rates in the U.S.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.   See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

 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.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.     See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Countries around the world respond to the discovery of the Omicron Covid variant by imposing new restrictions. Asian equities dipped after Friday’s sell-off, but Wall Street looks set to claw back some of its heavy losses. In the UK, Prime Minister Boris Johnson reintroduces some restrictions to slow the spread of Omicron and Health Secretary Sajid Javid says societies must learn to live with Covid. Meanwhile in the Netherlands, more than a dozen people test positive for the new variant after having arrived on two flights from South Africa.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Stocks sell off, and US futures plunge as the WHO calls an emergency meeting over a new covid variant discovered in southern Africa, and the EU renews vaccination calls. Travel bans return – as nations ban flights from the region. South Africa's Foreign Ministry says the UK's move to put six southern African nations back on the red list is rushed, and it's seeking a reversal. Crude prices also head deep into the red on renewed demand concerns and fears of a rising surplus in the first quarter. And French fishermen threaten to blockade the Channel Tunnel and the port of Calais today, in protest at UK fishing licenses.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Germany’s new coalition is unveiled with the SPD’s Olaf Scholz set to be Chancellor. The Greens receive the foreign and economy ministries while the FDP is set to run the finance ministry. The coalition says it will consider vaccination mandates while Italy tightens restrictions on the unvaccinated. According to November’s FOMC minutes, Fed members are considering rate hikes should price pressures continue – as the central bank’s preferred inflation measure surges 4.1 per cent on the year in October. Meanwhile, a dozen Chinese companies are added to the U.S. trade blacklist due to national security and foreign policy concerns.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. President Joe Biden announces the first emergency SPR release in a decade. More than 50mn barrels will be freed up in a bid to blunt spiking prices. In Germany, the new coalition government is expected to be unveiled today, after an impasse over who would lead the Bundesbank, and a last-minute intervention from acting Chancellor Angela Merkel. A massive sell-off of the Turkish lira sends it to historic lows against the dollar, with inflation in the country soaring to near-20 per cent and as President Erdogan vows to win an ‘economic war of independence.’See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

U.S. President Joe Biden renominates Jay Powell for a second term as Federal Reserve Chair. Lael Brainard gets the nod for Vice-Chair, after weeks of speculation that as the Fed Board’s only Democrat she could have been chosen for the top job. Biden stressed the need for the central bank’s continued neutrality and independence. The S&P 500 and the Nasdaq hit fresh record highs but investors are now focused on the Fed’s schedule for rate hikes. In corporate news, video-conferencing firm Zoom beats quarterly expectations and issues a better-than-expected outlook. However, shares are down on slowing revenue growth due to workers returning to offices. And the U.S. is set to release crude from its strategic reserves today in a bid to lower petrol prices.  See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.