Equities plunge again, dollar loses as Omicron fears reemerge

Equities plunge again, dollar loses as Omicron fears reemerge
Tuesday's trading mirrored Friday's declines, although losses in the markets have not been so dramatic so far as investors got spooked by the new coronavirus variant again.
Earlier today, Moderna chief Stephane Bancel suggested in a Financial Times article that the existing vaccines would struggle to cope with the omicron variant, predicting a 'material drop' in their effectiveness.

Therefore, the sell orders activated again, dragging down equities, US Yields (bond prices surged), and oil. At the time of writing, the 10-year US yield was down 5%, trading at around 1.40%.

The WTI benchmark was down 3% during the London session, trading at around 68 USD. However, yesterday's failure to stay above 70 USD seems bearish, with the medium-term trend turning to bearish as long as it remains below 70 USD.

The EURUSD pair rose 0.6% in the FX market and jumped to two-week highs, testing the strong resistance of 1.1370/80. Additionally, the MACD indicator is about to send a bullish signal from profoundly negative territory, potentially helping the euro bounce further.

The weaker dollar failed to spur demand for silver as the metal traded flat near 23 USD, trying to recover from the recent sell-off, which brought silver down 10% since its November peak at 25.50 USD. However, gold advanced today and was attacking the 1,800 USD threshold.

Later in the session, Federal Reserve Chair Jerome Powell will testify on the CARES Act before the Senate Banking Committee in Washington DC. His words usually bring volatility to the financial markets.

Other than that, the US calendar contains:
  • The housing price index.
  • The S&P/Case-Shiller Home Price Indices.
  • The Chicago PMI for November.
  • Consumer confidence for November.

Lastly, the API weekly crude oil stockpiles data will be released, likely impacting oil prices.
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