Omicron double surge in Europe triggered Asian share markets and oil prices to slide on MondayUpdated time: 19 Jan, 2022, 13:47 (UTC+04:00)
Omicron double surge in Europe triggered Asian share markets and oil prices to slide on Monday. Lockdown in the Netherlands accelerated stronger restrictions in the continent yet started to overwhelm investors with a clouded outlook of the global economy.
- S&P 500 futures and Nasdaq futures sunk 0.6-0.7%.
- MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.4%.
- Japan’s Nikkei plunged 0.7%.
- Oil prices slumped about 2%. Brent and the U.S crude price fell about $1.4-1.5 per barrel.
The market now saw the Fed and central banks turning more hawkish towards elevated inflation, by openly talking of March’s hiking rates and running down balance sheets no later than mid-2022. The chatter was a real trigger.
- Yields on U.S 10-year notes dropped 1.38% and put its two curves in the nearest flat since 2020, implying that tighter policy may lead to recession.
- For BoFA, this would leave equities bearish, although fund managers found that most of the stocks remained overweight and just 6% of expected recession next year.
- The U.S dollar index on the opposite, benefitted to reach its best this year at 96.665. The euro and sterling shed as Omicron erased the gains. The yen remained in safe haven.
Two crypto giants BTH and ETH had steadied in weekends after a week of uncertainty following the U.S central bank decision to withdraw from stimulus efforts. Two altcoins, Terra (LUNA) reached records high while Avalanche’s (AVAX) dropped sharply.