Omicron is casting a shadow over global markets and is proving to be one of the major forces moving the markets during the 2021 holiday season.
U.S Dollar
The U.S. dollar went up and was trading close to its highest point in 17 months against other major currencies today, Monday. The increase comes after Fed policymakers have suggested that the first interest rate raise after the Covid-19 pandemic could happen in March – earlier than expected.
Euro
The euro and the British pound recorded sharp losses after the Netherlands imposed a lockdown on Sunday and Britain’s health minister could not eliminate the possibility of further restrictions before Christmas as the Omicron Covid-19 variant is spreading throughout the country.
Yen
The yen was stronger while the Central Bank of China lowered its one-year prime rate on Monday. The move could support China’s hit real estate sector.
Turkish Lira
The Turkish Lira dropped, and the currency has become the world’s worst-performing currency in the last three months. The sharp drops are caused due to interest-rate cuts. Recep Tayyip Erdogan, the Turkish president, expressed his ongoing commitment to continue interest-rate cuts supporting his new policy with Islamic proscriptions on usury.
Stock Markets
Global stocks fell last week as central bank officials are signaling that they will be cutting stimulus to fight inflation. S&P 500, Nasdaq 100 and European futures went down at least 1%.
Asian stock markets dropped, and European stocks are trading sharply lower today, Monday, as Omicron Covid-19 cases climb, and tighter restrictions are being imposed across Europe possibly jeopardizing the region’s economic recovery.
Trading Oil
Crude oil prices plummeted over concerns that the rising Omicron Covid-19 cases, resulting in lockdowns and air travel restrictions could be prolonged and could hit demand for crude oil.
Gold
Gold was down today, Monday, in Asia. The fall could be attributed to the Fed’s indications that they could be raising interest rates earlier – possibly in March 2021.
What to Watch out for this Week:
Tuesday
Reserve Bank of Australia, December interest rate meeting minutes
Wednesday
EIA Crude oil inventory report
Thursday
U.S. consumer income, new home sales, U.S. durable goods
Friday
Closed U.S. Markets, European Markets – Earlier Close