Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com HIGH FREIGHT RATES: HERE TO STAY BUT KEEP AN EYE ON CHINA (1340 GMT) The pandemic has hamstrung previously well-oiled supply chains, choking many businesses" profit margins as they battle far higher transport costs. We may be in 2021"s final month but those hoping for Santa to deliver respite may be misguided, as charter rates could well remain elevated next year, with clients prioritising reliability at all costs. Charles Chasty, analyst at shipbroker Affinity Shipping, said this dynamic could be compounded by COVID-19"s Omicron variant as further mobility restrictions could pressure already strained shipping routes. "I can see the supply chain crisis lasting a while yet, which will provide support for the container and dry bulk markets," he told the Reuters Global Markets Forum. "The severity of the crisis remains somewhat up in the air, just as we thought we were moving back towards normality, Omicron has thrown a bit of a spanner in the works." Shipping stocks have broadly surged due to high freight rates, with Danish giant AP Moeller - Maersk (MAERSKb.CO) up about 45% this year, after rising by more than half in 2020. That said, a slowing Chinese economy could perhaps ease the tension of freight rates with China"s iron ore imports unlikely to climb at a fast clip and the surge in demand for coal likely to prove transitory. To join the Reuters Global Markets Forum, click here - https://refini.tv/3aAt61T (Aaron Saldanha) ***** TURNING THE METAVERSE INTO REALITY (1229 GMT) There"s a lot of talking about the metaverse these days, but putting all the building blocks together and make it a big business opportunity is going to be a completely different task. Tech infrastructure is going to be critical in the years ahead, and UBS believes the penetration of virtual and augmented reality headsets could turn a hurdle into a game-changer. "User interface devices (VR/AR headsets and glasses) are the gateway to the metaverse to provide immersive 3D user experience," said analysts at Swiss bank UBS led by Grace Chen. These devices still have very low penetration, but their market is expected to grow much faster than mature devices, and eventually "bring the internet experience to the next chapter." VR shipments are estimated at 10.7 million this year, a chunky 98% rise from last year, but still well below the 345 million PC units and 1.4 billion global handsets, UBS said. From there, they should rise almost six-fold to 61 million by 2025 on value rising to $1 billion, UBS added, noting how the key hardware device is AR which will take some time to develop. "The ultimate device in the metaverse is AR glasses but they require miniaturisation to individual"s eyesight and the development of new tech like MicroLed," they also said. "Whether Apple or Meta will be able to commercialise affordable augmented reality glasses is critical to the success of the metaverse," they concluded. Currently Meta Oculus is the market leader with a 75% market share expected in 2021, with Sony and Apple set to join in 2022. (Danilo Masoni) ***** WHO"S IN LOVE WITH RISK ASSETS (1223 GMT) No doubt the pandemic hasn’t hurt risk assets as they have been skyrocketing due to generous monetary stimulus from central banks since March 2020. According to Schroders Global Investor Study, which surveyed over 23,000 people from 33 locations globally, pandemic uncertainties don’t seem to hurt risk appetite too much, even for the future. “37% of people are more willing to allocate to high-risk asset investments, and this increased to 44% for the 18-37 age group,” Schroder report says. Furthermore, “half of the 18-37 and 38-50 age groups are also expecting more than 10% returns, a significantly higher proportion than those aged 71+,“ it adds. Presented with the scenario where interest rates are at zero or negative, 57% of investors aged 18-37 said they would make higher-risk investments to pursue returns. In comparison, only 17% would be more likely to spend and less likely to save. Electric vehicle related stocks are ranked first (24%), biotech or pharma funds are second (23%), while internet and tech stocks, as well as cryptocurrencies, are jointly in third position with 22%. (Stefano Rebaudo) ***** NO SMOKING? NO PROBLEM! (1025 GMT) It"s fair to say that New Zealand"s plan to forbid youngsters from ever buying cigarettes, clearly one of the world"s toughest crackdowns on the deadly habit, hasn"t sent tobacco shares in nicotine withdrawal convulsions this morning. British American Tobacco, Imperial Brands, and Swedish Match are cruising up between 0.2% and 0.7% with little sense that the Kiwi legislation could be the beginning of the end for the industry. There are many reasons for that. According to Citi analysts, New Zealand only represents 1% to 2% of the earnings before interest and tax (EBIT) of British American Tobacco and Imperial. Secondly, they stress strict smoking rules typically take a long time to pass into law and implement. Thirdly, well, smoking is probably doomed in the long run anyway. Citi analysts believe that "tradition cigarette consumption will continue to decline and that the last smoker may quit by 2050". Why then hold these tobacco stocks, which so many ESG funds wouldn"t touch with a barge pole? Looking at British American Tobacco and Imperial Brands" 8% dividend yields provides some kind of an answer. The trend in vaping is another answer. "Our clear preference for stocks which are transitioning to reduced-risk-products and hence we re-iterate our core positive stances on both Philip Morris and BATS", the Citi analysts say. Some reading: New Zealand to ban cigarette sales for future generations read more (Julien Ponthus) ***** STOXX ON THE UP, VOLATILITY EASES FURTHER (0902 GMT) European shares are off to a slightly positive start as good news on vaccine efficacy against Omicron reassured investors, helping put a key euro zone volatility gauge on course for its fourth straight day of declines. So while the pan-regional STOXX 600 (.STOXX) equity benchmark index was up 0.2% in early deals, euro STOXX volatility (.V2TX) dipped below 23 points, widening the distance from the post-Omicron peak to more than 10 points. Sectoral moves were muted with gains in consumer staples and healthcare more than offsetting weaker banks and energy stocks. (Danilo Masoni) ***** LOOK ON THE BRIGHT SIDE (0816 GMT) England is going under tougher COVID-19 curbs, Christmas parties are being cancelled across Europe and the United States, and Jefferies became the first big Wall Street bank to send employees home. But markets are looking on the bright side -- news that a three-shot course of BioNTech/Pfizer"s vaccine neutralised the Omicron virus variant in a laboratory test enabled stock markets to carry on merrily higher on Wednesday. Even S&P 500"s airlines index managed to recoup pre-Omicron highs. (.SPCOMAIR). But with focus returning to central banks and inflation, the rally has lost some of its edge. European and U.S. futures are flatlining, Japanese stocks fell 0.3% and a global equity index paused near two-week highs. Chinese factory gate prices at 12.9%, had eased only slightly from 26-year highs touched in October, data showed on Thursday. read more Elevated factory prices eventually feed into CPI which ticked up to 2.3% in November, from last month"s 1.5%. Authorities fixed the yuan a touch below the three-year highs hit on Wednesday but the inflation worry will limit how much it can weaken. China"s data sets the stage for Friday"s U.S. CPI, which some participants in this week"s Reuters monthly summit predicted would print with "a 7-handle". Core inflation could be above 5%, some reckon. It will be the last key piece of data before the December 14-15 Federal Reserve meeting, which could flag a step-up in the pace of policy tightening. In neighbouring Canada, markets now see interest rates rising from 0.25%, after the central bank on Wednesday dropped a reference to inflationary forces as temporary. Those inflation projections and the stock market rebound forced bond yields higher -- a three-day rise in 10-year Treasuries was their longest since mid-October. This morning, edgier equity markets have sent U.S. and German bond yields a touch lower and the dollar index is back at one-week highs. And data never ceases to surprise. Germany just reported October export figures which grew 4.1%, the highest in over a year and beating expectations of a 0.9% gain read more Key developments that should provide more direction to markets on Thursday: - Deutsche Bank shares down on WSJ report it may have violated U.S. criminal settlement read more -U.S. job openings jump to 11 million; fewer workers voluntarily quitting read more -Brazil central bank makes 150 bps rate hike, signals another read more -U.S. initial jobless claims/30-year Treasury auction -Emerging markets: Ukraine, Serbia, Peru central banks -U.S. earnings: Oracle, Costco, Lululemon -European earnings: Ocado, Rolls Royce (Sujata Rao) ***** EUROPE: EDGING UP (0729 GMT) European shares look set for a timid bounce this morning as inventors weigh vaccine reassurances against new COVID-19 restrictions amid caution ahead of U.S. inflation data on Friday which could provide the Fed more ammunition for tighter policy. Following yesterday"s pull-back, futures on main regional benchmarks in Europe were up around 0.3%, with sentiment also helped by hopes for monetary easing in China. U.S. stock futures were just below parity after gains yesterday on the back of data from BioNTech and Pfizer showing their vaccine shot offered some protection against the new Omicron variant. (Danilo Masoni) ***** Our Standards: The Thomson Reuters Trust Principles.