Yields, Euro Stoxx 50 Futures tumble as Omicron risks escalate


  • US 10-year Treasury yields renew three-week low, Euro Stoxx 50 Futures slump 2.5%.
  • Moderna Chief renews concerns over global vaccines’ inabilities to tame South African covid variant, Fed funds rally.
  • Fed’s Powell, US CB Consumer Confidence eyed for fresh impulse.

Market’s cautious optimism for the South African coronavirus variant turned out ephemeral as risk catalysts slump heading into Tuesday’s European session.

That said, the US 10-year Treasury yields drop seven basis points (bps) to refresh the lowest levels in three weeks while the Euro Stoxx 50 Futures drop 2.70% as bears attack 4,010 level by the press time.

While checking the fresh catalysts, comments from globally renowned covid vaccine producer Moderna’s Chief Stéphane Bancel will gain major attention as markets previously cheered hopes of proper vaccines to overcome the fears from Omicron.

“The chief executive of Moderna has predicted that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19 and warned it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale,” said Financial Times.

Following the news, Fed funds futures rally while the MSCI emerging markets index falls about 0.8% to a one-year low.

Earlier in the day, investors cheered US President Joe Biden’s rejection of the need for lockdowns and comments from Fed Chairman Jerome Powell and US Treasury Secretary Janet Yellen. Powell stayed intact on his inflation view, offering notable support to risk appetite whereas Yellen pushes Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy.

Moving on, preliminary readings of November’s Consumer Price Index (CPI) will precede US CB Consumer Confidence for November and covid updates, followed by Fed Chair Jerome Powell’s testimony, to direct short-term market moves.

Read: Yields, S&P 500 Futures portray cautious optimism, coronavirus variant is the key

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD falls below 1.1300 as dollar keeps its strength ahead of Fed

EUR/USD is trading in the negative territory below 1.1300 on Wednesday as markets wait for the FOMC to announce its policy decisions following its two-day meeting. The US Dollar Index holds above 96.00 ahead of the American session, supported by the modest recovery seen in US Treasury bond yields. 

EUR/USD News

GBP/USD holds above 1.3500 for now on improving sentiment

GBP/USD is posting modest daily gains above 1.3500, supported by the positive shift seen in market sentiment. The UK's FTSE 100 Index is rising more than 1.5% and S&P Futures are up 2.4% ahead of the Fed's policy announcements. 

GBP/USD News

Gold on the defensive below $1,850, focus remains on FOMC

A combination of factors dragged gold away from over two-month high touched on Tuesday. A recovery in the risk sentiment, Fed rate hike bets acted as a headwind for the commodity.

Gold News

Dogecoin short squeeze will launch DOGE to $0.25

Dogecoin price has been on a wild ride over the past few weeks. After gaining more than 50% between January 11 and January 15, DOGE dropped a further 44% to print new nine-month lows. 

Read more

Bank of Canada Rate Decision Preview: No surprises for a 25bps rate hike Premium

BOC to keep the overnight rate steady at 0.25% at its first policy meeting of 2022. A surprise 25-bps rate hike cannot be ruled out amid hotter Canadian inflation, labor market. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures