The omicron sell-off
Last week, a new variant of covid detected, which is said to be vaccine resistant, created panic among all markets, and all of them dropped and experienced the worst day in 17 months.
This week the US fed chairman testifies, and in future, it will be interesting to see if the new virus variant will affect the monetary policy of the house. We will get Europe inflation data and US & Canada employment reports of the month on the data side.
European indices fell on average 4.5% on Friday 26 Nov, suffering the worst day followed by wall street at an average of 2.34%, and US sessions were closed due to the Thanksgiving holidays.
Scientists worry that the South African mutated virus may be able to evade immunity and be more transmissible. As a result, many nations, especially Europe already announced new restrictions as rapidly increasing infections.
After Powell was reappointed as head of Fed Reserve Bank, investors and traders increased their bet on a potential interest rate increase in next year, even after variant news they kept it. If so, the US dollar is likely to follow the uptrend, but if the virus situation worsens, a decline could be possible.
Even a significant drop was seen in Crude oil prices over concern of Virus and plunged 12% during the 1-day session on Friday, but Monday got some corrections. But still, there is a concern, and we can see the downtrend of the oil is still continuing.
However, gold is not showing any major upward or downward movement on this factor. However, in the long term, investors may shift their portfolios to yellow metals as safe-haven investments.
This article was submitted by Kamal Paliwal, Business Development Manager at HonorFX.