A risk-off mood was triggered following news overnight that Moderna believes that existing vaccines will be less effective against the new Omicron COVID variant and it may take months before a new vaccine is available. The S&P 500 opened lower by nearly 1%, UST 10-Yr yields are down 6 bps to 1.43% and the DXY dollar index is lower by 0.65%. Eurozone inflation surged in November and emerging market stocks hit a one-year low. Fed Chair Powell and Treasury Secretary Yellen speak to the Senate Banking Committee today.
November 30, 2021
EUR/USD 1.1373 GBP/USD 1.3345 USD/CAD 1.2756 AUD/USD 0.7156 USD/JPY 112.80 USD/CNH 6.3739 USD/ILS 3.1462 USD/MXN 21.4359 USD/CHF 0.9165 USD/INR 75.1675 USD/BRL 5.5988 USD/SGD 1.3649 USD/DKK 6.5386 USD/SEK 9.0152 USD/NOK 9.0426
The dollar is lower, as the risk-off mood this time increased demand for other safe haven currencies –the Japanese yen and Swiss franc. Other havens, gold, and T-bonds were also in demand. Traders await comments from Fed Chair Powell and Treasury Secretary Yellen, who appear at a Senate Banking Committee hearing. Chicago PMI and Conference Board Consumer Confidence are released today, and both are expected to be weak.GBP
The UK pound is slightly higher on the back of the weaker US dollar. Traders await comments from Catherine Mann, a member of the Monetary Policy Committee of the Bank of England, who may opine that rate hikes may slow on Omicron concerns. UK PMI data for November will be released tomorrow and Friday.EUR
The euro is higher today and to its best levels in over a week on the back of multiple factors: the weaker dollar, a short-covering rally after a devastating sell-off in November which saw the EUR/USD drop over 4%, and CPI inflation data for the eurozone, which unexpectedly surged in November to a record high at 4.9% YoY.CAD
The Canadian dollar is lower by 0.3%, the worst performance by a G-10 currency. Crude oil prices have fallen below $70 a barrel. The USD/CAD peaked above 1.28 earlier today, its highest level since September, before falling on profit-taking following upbeat Canada GBP Q3 data: +5.4% beat expectations of 3% and was better than Q2’s 1.1% contraction. Traders now await Friday’s jobs data for November.ASIA/PACIFIC
The Japanese yen continues to rally after the USD/JPY peaked at 115.52 on November 24. Its gains were fueled by safe haven buying and upbeat Housing Starts in Japan for October, which rose 10.4%, higher than both +5.5% expected and +4.3% for September. Japan’s Prime Minister Kishida banned the entry of all new foreign visitors starting today due to concern with the Omicron COVID variant .
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