The US stocks are set to post new record highs, ISM PMI and JOLT on focus

On the second trading day of 2022, global markets extended the upbeat moves seen on Monday.

The dollar's gains were helped by a rise in US Treasury yields, as investors bet on the Fed raising rates, with the US 2-year and 5-year notes soaring to their highest since March 2020.

Dollar boosts on the back of rising yields

On the second day of the 2022 trading calendar, dollar bulls came out in force. The dollar strengthened sharply against all the major currencies, with EUR/USD falling below 1.13 again and USD/JPY closing past its four-year highs.

A rise in Treasury yields contributed to the rise in the US dollar as well. The 10-year yield rose above 1.6% for the first time in over a month, and the 2-year rates reached their highest level since March 2020. It is finally being noticed that there is a demand for the dollar due to the prospect of three rate hikes from the Federal Reserve this year. While the US dollar suffered a tough month despite the Fed's hawkish guidance for December.

Stock markets are set to keep the rally

The expectation that Omicron will push the US to the point where the country will achieve herd immunity sooner will enable the economic recovery to continue without hindrance.

US stocks are set to open at new record highs later today.

As a result of some eye-catching headlines such as Tesla's record deliveries in the fourth quarter and Apple's brief flirtation with a market value of $3 trillion, market sentiments were positively influenced.

OPEC+ meeting sends Brent above 80 dollars

Tuesday, OPEC+ decided to stick with its increase in oil production for February because the Omicron Coronavirus is expected to have only a temporary impact on demand.

Since August, OPEC and its allies, including Russia, have raised their output target by 400,000 barrels per day (bpd) every month.

Despite calls from the United States for more crude to cool prices at $80 a barrel, the group says the market is balanced, and there is no need for additional crude.

After the pandemic-induced slump in demand and prices, OPEC+ is unwinding its record-breaking production cuts of 10 million barrels per day, imposed in 2020. Brent crude has rallied 50% last year and is trading above $80 on Tuesday.

The current plan would see OPEC+ raise the target by 400,000 bpd again for February, leaving about 3 million bpd in cuts to unwind by September, per an agreement last July.

Events of the day

Later, the Institute for Supply Management will release its monthly manufacturing survey, and the survey is expected to show a slight decline in overall activity and input and output prices.

In addition, the Labor Department will also release its monthly Job Openings and Labour Turnover Survey for November, which will give us a good indication of whether October's dip in the so-called 'quit rate' was simply a blip or the beginning of something more like a trend.