US Session (11/26/2021)

US Stocks fell in a global selloff as fears grew that a new coronavirus type discovered in South Africa might trigger new outbreaks and jeopardize the fragile economic recovery. The value of haven assets soared.

It's the S&P 500's worst post-Thanksgiving performance since 1941 when President Franklin D. Roosevelt signed a bill making the fourth Thursday in November a national holiday.

The Russell 2000 index fell 3.7%, and the Nasdaq 100 index fell to its lowest close in nearly two weeks. Stocks in the travel and leisure sector fell, while those in the stay-at-home sector rose. The Stoxx 600 index in Europe fell 3.7%, the highest since June 2020. For the first time since late September, oil dipped below $70 a barrel in New York.

Treasury yields jumped on haven bids, with the 10-year yield falling to its lowest level since March 2020 on a closing basis, as traders pushed back bets on the Fed raising rates.

With the dollar sinking, the Japanese yen emerged as the main safe-haven currency of the day.

A Market Crash Was Coming, Coronavirus Was Just the Spark | Time

Asia Session (11/28/2021)

US equities futures, crude oil, and bond yields all rose on Monday as investors tried to assess the economic dangers posed by the Omicron coronavirus strain, restoring some calm to markets.

S&P 500, NASDAQ 100 and European contracts jumped, WTI oil rallied back above $70 a barrel and the 10-year US Treasury yield rose past 1.50%. Asian stocks fell but the moves were modest compared with Friday's global equity selloff.

The yen fell, the dollar remained stable, and the South African rand, where the variation was identified, rose versus the greenback. While many questions regarding the new strain remain unresolved, two South African health specialists believe it is causing only minor symptoms thus far. The World Health Organization has advised caution, stating that assessing the pathogen will take time.

Traders last week pushed back the projected timing of the Federal Reserve's first 25-basis-point rate hike from June to July. Fed's Bostic downplayed economic risks from a new variant, saying he's open to reducing asset purchases more quickly to combat inflation.


Europe Session (11/26/2021)

A post-Thanksgiving selloff swept throughout global markets, from equities to commodities, as well as safe-haven assets, sending them soaring on concerns that a new coronavirus type discovered in South Africa might trigger new outbreaks and jeopardize the fragile economic recovery.

The opening bell for the US markets, which were due to return after their holiday break for a limited trading day, drew all attention. The crisis in Asia and Europe will not spare New York markets, according to plummeting futures and a rising fear gauge. Treasury prices rose, implying that traders were hedging their bets on the Federal Reserve's monetary tightening. With the dollar sinking, the Japanese yen emerged as the dominant safe-haven currency of the day.

The WHO and experts in South Africa are reportedly working at breakneck speed to determine how rapidly the b.1.1.529 variant may spread and whether it is vaccine-resistant. The new danger adds to the growing list of concerns that investors are facing, including rising inflation, monetary tightening, and slowing GDP.

The WHO will give an update regarding the new Covid variant after their panel meeting finishes; Estimating the impact will take weeks.

Money markets are pushing back bets on a second 25 basis point Fed hike until 2023.

The European Commission has stated that it is considering restricting travel from nations where the new COVID virus has been detected.

Germany's Health Min. Spahn: The situation with coronavirus currently is serious, more so than at any previous moment in the pandemic's history.

The Japanese government has approved a supplementary budget for FY2021/22 with 36 trillion yen in expenditure and 22 trillion yen in new debt to pay the Covid-19 stimulus package.


Monday FX Options Expiries

EUR/USD: 1.1300 (EU1.6B), 1.1500 (EU843.9M), 1.1470 (EU838.7M)
USD/JPY: 115.25 ($995M), 115.75 ($543M), 113.40 ($350M)
USD/BRL: 5.5000 ($325M), 5.4500 ($320M), 5.5995 ($300M)
USD/CAD: 1.2300 ($1.24B), 1.2600 ($1.24B), 1.2055 ($802M)
AUD/USD: 0.7550 (AUD1.1B), 0.7100 (AUD790.1M), 0.7700 (AUD324.7M)
USD/MXN: 21.60 ($360M)
USD/CNY: 6.3900 ($375M), 6.4800 ($300M)
EUR/GBP: 0.8625 (EU430.7M)