As we write, the new Omicron variant of COVID-19 is reverberating through markets and the impact on markets and economies is highly uncertain. It is an open question as to whether this will be a less harmful variant that can be addressed within
current parameters and vaccinations, or a more virulent strain that is a greater threat to public health. The latter would likely result in ongoing risk-off moves in markets as they anticipate renewed restrictions that would lower growth and
foster even more inflation, and potentially more policymaker action.
Other risks to the outlook include US-China trade tensions, elections in the US and parts of Europe and continued Brexit uncertainty in the UK.