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Dead cat bounce?
That might be the case but risk assets are leading the charge today although the gains pale in comparison to the drop experienced on Friday amid Omicron fears.
There will still be plenty of back and forth in this latest saga it seems as we won't get a clear idea of the impact of the Omicron variant until the next few weeks.
But as it spreads to more countries and results in more border shutdowns (and even lockdowns), that will weigh on sentiment as we look towards the year-end.
I don't expect the big boys like the US and Europe to revert back to drastic lockdown measures, though the spread of COVID-19 itself, Omicron excluded, is already poking questions for the latter as seen with Germany's situation particularly.
But one can never say never when it comes to this so that is a considerable downside risk to consider for markets in general if we trend towards that direction.
If anything, expect Asia to adopt a more cautious approach after having toyed with the idea of reopening borders in recent months. That will just add to a setback in terms of the global outlook and travel reopening in general.
Again, this all depends on how serious of a threat Omicron may be and I reckon at this stage, "no news is good news" is an approach that might be adopted by market participants when navigating through the headlines.
Otherwise, any real good news i.e. vaccine effectiveness against Omicron is but several weeks away at least so expect things to keep more volatile in the meantime.
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