Market Drivers – US Session – 26-11-2021

The US session did not witness the release of any remarkable economic data, rather it has been dominated by concerns of probable lockdowns in Europe, the emerging new virus strain.

On Friday, oil prices recorded their largest one-day drop since April 2020 by falling about $10 a barrel, as a new COVID-19 variant spooked investors and added to concerns that a supply surplus could swell through 2022’s first quarter. Oil fell with global equities markets on fears the new variant could decrease economic growth and fuel demand.

On Friday, US Treasury yields experienced sharpest drop since the pandemic began as investors rushed toward safe haven assets following the emergence of a new coronavirus variant in South Africa.The two-year Treasury yield, which typically moves in step with interest rate expectations, was down 14.2 basis points at 0.502

The United States, Britain and several European countries have restricted travel from southern Africa, where the variant was detected, as researchers sought to find out if the mutation was vaccine-resistant.

The World Health Organization has designated the new variant as “of concern,” according to the South African health minister.

Brent crude fell $9.21, or 11.2 per cent, to $73.02 a barrel. WTI crude was down $10.10, or 12.9 per cent, at $68.29 a barrel, after Thursday’s Thanksgiving holiday in the United States.

Both contracts were heading for their fifth week of losses and their steepest falls in absolute terms since April 2020, when WTI turned negative for the first time.

The variant in South Africa emerged over the US Thanksgiving Holiday, causing ructions in a market previously caught between producer and consumer nations.

Bitcoin fell 8% Friday, on the same day, the S&P 500 index retreated by 2.3%, that is to mean the most famous cryptocurrency is not the ideal hedge against volatility in the financial market as may be claimed by its backers.

The British pound recovers from earlier losses during today’s trading despite risk-of-market sentiment clouding the financial markets due to discovering a new COVID-19 variant in South Africa. The GBP/USD pair is trading at 1.3341, up some 0.14%.

In the overnight session, market sentiment fell as South Africa announced the discovery of a new COVID-19 variant.
Gold rose Friday morning in Asia, poised for its worst week in five months on growing bets. The US Federal Reserve will begin to taper and raise interest rates faster than expected to stem rising inflation.

Gold futures rose 0.76% to $1,797.80. The yellow metal fell more than 2.8% during the week and is heading for its worst week since June 18, 2021.