Citi expects more volatility in eurozone government bond yield spreads in 2022 but its spread forecasts aren't materially higher than current levels, largely because of recent rapid widening toward its targets, rates strategist Jamie Searle said.

For the 10-year Italian BTP-German Bund yield spread, Citi forecasts an average of 140-160 basis points; this compares with levels slightly below 138 bps at Thursday's close, according to Tradeweb.

Commodities:

Brent crude oil rose after OPEC+ pressed ahead with plans to raise oil production by 400,000 barrels a day in January despite the emergence of the Omicron coronavirus variant and the recent move by oil consuming nations to tap strategic reserves.

Prices fell after the decision on Thursday but then rebounded on the day and continue higher Friday.

Goldman Sachs's Damien Courvalin points to the alliance's promise to immediately adjust their plans should the situation require it. Similarly, while OPEC+ will raise production in January, the small increase exacerbates "the long-term deficit...[and] we believe current price levels offer compelling opportunities to reposition for the ongoing structural bull market," he added.

London gold prices were flat, with the selloff in the precious metal appearing to lose steam. The prospect of the Fed tapering its asset-buying program has boosted the U.S. dollar this week, putting pressure on gold.

That is despite the rising risk aversion and asset selloffs that have come with the emergence of the Omicron coronavirus variant, said Oanda's Jeffrey Halley.

LME three-month copper futures were, after gentle losses on Thursday, with most metals prices moving higher as well.

EMEA HEADLINES

Eurozone Retail Sales Rose in October, But Missed Expectations

Eurozone retail sales rose in October but failed to meet expectations, the European Union's statistics agency Eurostat said Friday.

The volume of retail sales increased 0.2% in October compared with the previous month, after a downwardly revised 0.4% decrease in September, Eurostat said. Economists polled by The Wall Street Journal had forecast a 0.3% increase for October.

Turkey Annual Inflation Rose to Three-Year High in November

Turkey's annual rate of inflation rose for the sixth consecutive month in November to a three-year high as a weaker lira and higher inflation expectations pushed prices up further.

The consumer price index rose 21.31% in November compared with the same period of 2020, the Turkish statistics office Turkstat said Friday.

Allianz Sets out Midterm Targets

Allianz SE on Friday set out higher financial targets for the next three years, as the German insurer looks to focus on its most profitable business lines.

Marking its capital-markets day, Allianz said it is aiming to book 5%-7% compounded average annual growth in earnings per share between 2022 and 2024. This will be driven by higher revenue, better profitability and efficient capital management, the company said.

Dassault Aviation, Airbus to Supply UAE With Military Aircraft in $19 Bln Deal

Dassault Aviation SA said Friday that it will supply the United Arab Emirates with 80 Rafale F4 fighter jets as part of wider deal with the French aerospace industry worth more than 17 billion euros ($19.21 billion).

At 1102 GMT, shares in the French manufacturer of military and business jets were up 7.3%.

Scientists Studying Omicron in South Africa See Rise in Covid-19 Reinfections

Scientists in South Africa tracking the spread of the Omicron variant said Thursday they are seeing a rise in reinfections in people who had recovered from Covid-19 as the country reported another sharp daily rise in new cases.

The scientists' conclusions suggest previous infection provides less protection against the new variant than against earlier versions. They also offer a possible explanation of why Omicron has been able to spread so quickly in the country, outpacing even the highly transmissible Delta variant, which is currently dominant in much of the rest of the world.

Germany Restricts Social Contact for Unvaccinated People

Germany is tightening restrictions aimed at curbing the spread of the coronavirus amid a recent surge in cases, including a ban for unvaccinated people from retail and social gathering venues.

During a joint conference with the heads of regional governments, incumbent chancellor Angela Merkel said the government would extend the so-called 2G rule--which grants access to venues only to the vaccinated or to people who have recently healed from the virus--to retail, excluding shops for basic needs. Ms. Merkel said that cultural events and leisure activities will only be open to people who are vaccinated or have recovered from Covid-19 independently of the incidence of new infections on the population.

Societe Generale Draws Line Under Two Legal Cases in the US

Societe Generale SA France said Friday that the U.S. Department of Justice has requested the dismissal of two cases involving the bank.

The legal proceedings ended after the bank complied with its obligations per the deferred prosecution agreements it struck with the U.S. authorities three years ago.

GLOBAL NEWS

November Likely Saw Strong Job Gains, but Omicron Threat Looms

Lower Covid-19 case numbers likely helped propel the U.S. economy and powered strong job gains in November, economists say, but the new Omicron variant could jeopardize that progress.

Economists surveyed by The Wall Street Journal estimate that employers added 573,000 jobs in November, roughly on par with October. The unemployment rate is expected to tick down to 4.5% from 4.6%. The Labor Department is schedule to release November employment figures at 8:30 a.m. Eastern time Friday.

Companies Cling to Libor as Key Deadline Nears

U.S. companies need to give up the London interbank offered rate for new debt at the end of December. Many want to close just one more deal before that.

Come Jan. 1, banks won't be able to issue new loans or other financial contracts using Libor, which underpins trillions of dollars in corporate loans, derivatives and home mortgages. They will, however, be able to keep referencing Libor for debt issued before the year-end deadline through June 2023.

Citigroup Applies for China Securities License

Citigroup Inc. has applied for a securities license in China, according to a person familiar with the matter, as the New York-based banking giant eyes a bigger presence in the world's second-largest economy.

The bank recently submitted its application to the China Securities and Regulatory Commission, the person said. Citigroup is also planning to apply for a futures license in the coming months and intends to hire around 100 people in mainland China in the next two years to support its expansion onshore, the person added.

A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

It's official: Owners of individual retirement accounts with assets invested in gold and silver coins can't store them in a safe at their home.

So ruled the judge in a recent Tax Court case, Andrew McNulty et al. v. Commissioner. The decision will cost Mr. McNulty and his wife Donna dearly-taxes of nearly $270,000 on about $730,000 of IRA assets, plus penalties likely to exceed $50,000.

Asia-Pacific Nations Use Tougher Tactics to Combat Omicron Variant

Countries in the Asia-Pacific region are creating tougher rules for those infected with the Omicron Covid-19 variant, as governments move more aggressively than they have against all other previous iterations, including Delta.

The modifications come as Omicron begins to reach the Asia-Pacific region, with Australia, Hong Kong, India, Japan, South Korea, Singapore and Malaysia reporting confirmed cases. The initial moves focused on national travel restrictions and border tightenings.

Omicron's Severity Will Take More Time to Assess, Doctors Say

JOHANNESBURG-It is still too early to tell whether Covid-19 caused by the new Omicron variant is milder or more severe than that from other strains of the coronavirus, doctors tracking a rapidly growing outbreak in South Africa said Friday.

The country, which has more known Omicron cases than any other, is likely to be the first to deliver answers to the questions doctors and scientists have been grappling with since the World Health Organization declared the new strain a "variant of concern" a week ago. Key among those are whether Omicron makes those infected sicker, whether it is more transmissible and in how far current Covid-19 vaccines or a past infection protect against the variant.

U.S. to Lead Global Effort to Curb Authoritarians' Access to Surveillance Tools

WASHINGTON-The U.S. plans to work with other countries to limit exports of surveillance tools and other technologies that authoritarian governments can use to suppress human rights, an alleged practice in China.

The Biden administration said Thursday that it would launch an initiative with friendly nations to establish a code of conduct for coordinating export-licensing policies. The effort would also see participating nations share information on sensitive technologies used against political dissidents, journalists, foreign government officials and human rights activists, administration officials said.

Biden Administration Issues Cybersecurity Directives for Freight and Passenger Rail

WASHINGTON-Nearly all U.S. freight and passenger rail systems will be required to report certain cybersecurity incidents to the Department of Homeland Security within 24 hours of discovery under new directives published Thursday by the Biden administration.

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