Sentiment worsens
The more the market learns about the latest covid variant, the more worried it gets.
US 10-year yields are now down 8 basis points to 1.567%. Just on Wednesday, the Fed's Daly dropped a bombshell by hinting at support for a faster taper but that could quickly be off the table.
USD/JPY is down 68 pips to 114.67 and yen crosses are down significantly more, led by AUD/JPY which is down 108 pips to 81.83. That chart isn't looking pretty as it falls into an abyss of technical support.
I suspect these moves will peter out without any additional information on the variant. After all, this is based on a spike in South African cases and genomic sequences of fewer than 100 cases.
But like I wrote today, if you're going to panic, it's better to panic early than panic late.
