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Risk yo-yos on virus headlines: European Forex news roundup

  • 08 December, 2021
  • 5:22 pm EET

Risk yo-yos on virus headlines: European Forex news roundup

The latest forex news from the European trade session on December 8, 2021.

 

The day opened with a mixed tone in the market, but that moved to being more risk conservative amid news of the UK implementing more COVID-19 steps to combat omicron.

The risk mood deteriorated as equities sank and bond yields fell. S&P 500 futures erased an early 0.4 % gain to trade flat, while 10-year Treasury rates fell by more than 4 basis points to 1.43 % .

In terms of currency, the USD/JPY fell from 113.50 to 113.31 as risk sentiment eased. Oil slid from $72.50 to $71.50 in the commodities market as virus fears resurfaced.

But everything changed when Pfizer presented a pilot research showing that three doses of its vaccine was enough to neutralize the omicron strain.

This resulted in a 180° shift in risk sentiment, with equities rebounding sharply. S&P 500 futures surged to a 0.5 % gain before reversing part of that ahead of US trading.

Meanwhile, Treasury yields recovered, with 10-year yields nearly reversing the day’s falls to 1.47 % .

In turn, USD/JPY recovered to 113.85, while AUD/USD remained stable around 0.7120-30 levels for the day.

The pound is the conspicuous laggard, since it is under pressure from the domestic news mentioned above. EUR/GBP is rising to test its 200-day moving average of 0.8555, while GBP/USD is falling to new year lows below 1.3200.

The latest twist and turn today exemplifies how the market is still captivated by omicron developments. More reactions are expected in the next days/weeks as more information is acquired and digested.

 

Markets News :

  • EUR leads, GBP lags on the day
  • European indices mixed, a little lower; S&P 500 futures up 0.2%
  • US 10-year yields down 0.3 bps to 1.47%
  • Gold flat at $1,784.90
  • WTI up 0.2% to $72.20
  • Bitcoin down 2.5% to $50,832

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