Stocks tumble over Omicron fears


Stocks and other risky assets fall sharply at the start of the week’s trading, with markets troubled by the rapid spread of the omicron and the apparent death of Biden’s Senate infrastructure bill.

  • The omicron variant of the coronavirus continues to spread rapidly, particularly in the UK and other European countries, while it also begins to spread in the United States. The morbidity of the new variant remains uncertain but it seems to be transmitted extremely easily. The caseload appears to be enormous, with the UK now recording almost 100,000 new cases per day. The spread is also very strong in the Netherlands (which have just put in place a full lockdown), Denmark and Norway. Markets are frightened by omicron’s potential ability to force more lockdowns and economic disruption. Across the globe, stock markets and risky assets such as commodity-linked currencies have all fallen during today’s Asian session, and markets are firmly in risk mode.

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  • Senator Manchin has announced that he cannot vote for Biden’s infrastructure bill, which condemns it, in its current form, to fail to pass in the Senate. This helped to shake up the markets in the United States which were counting on some economic stimulus from the bill as its reach was so great.
  • In the Forex market, the Japanese yen is the strongest currency, along with other safe havens such as the US dollar, Swiss franc, and precious metals, while the Australian dollar is the weakest major currency., as well as other commodity currencies. Crude oil is also particularly weak.
  • Turkish lira continues to fall to new record lows after President Erdogan again called for further Turkish rate cuts in the name of Islam. The USD / TRY currency pair is now trading well above 17 Lira to the dollar, a record high. Although the Turkish Lira looks very tempting for trend traders, the overnight swap rates and spreads imposed by brokers are so high that it is difficult to do so profitably.
  • Last week saw the a weekly increase in new confirmed cases of coronavirus worldwide, the highest number recorded in a week since last August.
  • It is estimated that 56.8% of the world’s population have received at least one dose of a vaccine against the coronavirus.
  • The total number of new confirmed cases of coronavirus worldwide stands at more than 275 million with an average case fatality rate of 1.95%.
  • The rate of new coronavirus infections now appears to be increasing fastest in Australia, Bolivia, Canada, Denmark, Ethiopia, Finland, France, Iceland, Italy, Kenya, South Korea, Malta , Monaco, Nigeria, Norway, Portugal, San Marino, Spain, Sweden, Switzerland, Vietnam, United States and United Kingdom.


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