A new round of unsettling volatility

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news there has been a huge change of mood in financial markets.</p><p>Normally, this week would be focused on the upcoming non-farm payrolls report for November and the results of the Black Friday/Cyber Monday retail sales events. But the sudden risk-off mood has changed the perspective.</p><p>Investors took heed of the <a href="https://www.who.int/news/item/26-11-2021-classification-of-omicron-(b.1.1.529)-sars-cov-2-variant-of-concern" target="_blank"><strong>new WHO warnings</strong></a> of the emerging South African variant that is probably resistant to current vaccines, and the early closing of borders again in response, and have reacted in a sharp risk-off manner globally.</p><p>Commodity prices, equity prices, and interest rates have all tanked substantially, and there has been a rush to the 'safety' of the core currencies. The NZD has not fared well.</p><p>Copper fell -3.6% in markets on Friday to US$9465/tonne. Aluminium lost -4.2% to $2,601/tonne, zinc shed -3.1% to $3,197, lead was down -0.4% to $2,261, tin eased -0.5% to $38,600 while nickel ceded -3.7% to $19,895.</p><p>Oil prices sank much more, down -13% on the day and have stayed down.</p><p>Countries around the planet have rushed in new travel restrictions. New Omicron (South African) cases have been detected in Europe, Australia and Hong Kong now, indicating broad travel spread already.</p><p>Meanwhile, it is emerging that Black Friday may have been a retail fizzer.</p><p>In China, they <a href="http://www.stats.gov.cn/tjsj/zxfb/202111/t20211126_1824870.html" target="_blank"><strong>reported</strong></a> profits (¥818 bln) earned by their <a href="http://www.stats.gov.cn/tjsj/zxfb/202111/t20211126_1824870.html" target="_blank"><strong>industrial firms</strong></a> rose by almost a quarter above 2020 levels (¥6