- US 10-year Treasury yields, S&P 500 Futures consolidate the biggest daily losses since early pandemic days.
- Comments from US NIH officials, Israel help to cut back on the covid variant fears.
- Fed’s Bostic rejects challenges to Fed’s rate hike, ECB’s Lagarde got reason to defend easy money policies.
- Speeches from US President Biden, Fed Chair Powell will be the key.
Having witnessed a large risk-off move in the market’s response to the South African origin COVID-19 variant, sentiment improves during early Monday as health officials from the US and Israel placate fears of a widespread outbreak of the deadly virus strain.
Having identified zero cases of the fresh COVID-19 infections in the US, the National Institutes of Health (NIH) officials renewed hopes that the virus vaccines, as well as the booster doses, can help overcome the latest challenge to the global economy. On the same lines were comments from Israeli Professor Dror Mevorach who terms ‘Omicron’ as less severe than the ‘Delta’ version of the coronavirus.
It’s worth noting that Australia and Canada become the latest among the top-tier economies to announce fresh infections relating to the stated virus variant, preceding the UK, Italy, Belgium and Israel.
Following the initial breakout from South Africa, the World Health Organization (WHO) termed the covid strain as “a variant of concern” while also dubbing it as ‘Omicron’. The risk appetite roiled the previous day after multiple countries raised concerns over the fresh version of the coronavirus, especially at the time when the major central banks were expected to announce monetary policy tightening. The same weighed down the yields and equities while also taking the US Dollar Index (DXY) to the south, making the Japanese yen (JPY) the winner among the G10 currencies.
However, recent comments from Atlanta Federal Reserve President Raphael Bostic reject market talks that the virus strain will ease inflation fears by saying, “Covid is the source of inflation.” On the contrary, European Central Bank (ECB) President Christine Lagarde said, "There is an obvious concern about the economic recovery [of the euro zone] in 2022, but I believe we have learned a lot.” ECB’s Lagarde adds during the interview to Italian news, per Reuters, “We now know our enemy and what measures to take. We are all better equipped to respond to a risk of a fifth wave or the Omicron variant".
Given the mixed chatters over ‘Omicron’, market players are likely to stay on the current path of consolidating Friday’s losses ahead of the key speeches from US President Joe Biden and Federal Reserve (Fed) Chairman Jerome Powell.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.