Authorities detected the first Omicron case in mainland China
Wall Street stocks slipped from all-time highs overnight as virus-related worries have resurfaced amid rising cases globally. Also, investors proceeded to profit-taking ahead of the crucial Federal Reserve and other central bank meetings. As such, the S&P 500 index fell 0.9%, the tech-heavy Nasdaq index dropped 1.4%, and the Dow Jones shed 0.89%. However, US stock index futures rose early on Tuesday, signaling some improvement in risk sentiment.
Asian stock markets came under pressure today as the spread of the Omicron variant deterred buyers ahead of the Fed policy meeting. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.46% after authorities detected the first Omicron case in mainland China. Hong Kong’s Hang Seng was down 1.33%, and China’s Shanghai Composite fell 0.53%
In Europe, equities opened marginally higher on Tuesday ahead of the key central bank meetings, with the Europe-wide Stoxx 600 index adding over 0.5% in early deals. Still, the overall tone remains cautious amid the persisting threat of a rapid spread of the Omicron variant both in the region and globally.
In currencies, the dollar continues to cling to one-year highs, staying elevated amid rising bets that the US Federal Reserve will announce on Wednesday that it will slow its bond-purchasing program more rapidly, which, in turn, would set the stage for rate rises earlier than expected. EURUSD continues to struggle below the 1.1300 figure while also being capped by the descending 20-DMA that has already dipped below the psychological level. Should the pressure intensify in the short term, the common currency may derail the 1.1260 immediate support.
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