Omicron has led investors to reassess their risk appetite. Latest reports indicate the new COVID variant is more transmissible and less severe than those from previous waves, but the impact on vaccine efficacy and hospitalisations remains unclear. This raises near-term uncertainty. As investors, we have been here before. Despite several virus waves, the global stock market index has almost doubled from March 2020 pandemic lows. Authorities are better prepared today versus the first outbreak. While we need to keep a close eye on the latest wave, a bigger concern is how the outbreak impacts the inflation outlook and how the Fed responds to it. We still expect inflation to subside by the middle of next year, enabling the Fed to go slow on rate hikes after finishing bond purchases tapering. Thus, if Omicron plays out like the past waves, we would use any ensuing market volatility to pick up our preferred risk assets and longer-term structural themes.Speakers:- Marco Iachini, Cross-Asset Strategist, Standard Chartered Bank- Abhilash Narayan, Senior Investment Strategist, Standard Chartered BankFor more of our latest market insights, visit Market views on-the-go. 

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