26/11/2021 Stocks, Treasury yields and oil are all lower while the yen jumped as a new Covid-19 strain discovered in southern Africa sent a wave of caution across global markets.
An Asia-Pacific equity gauge slid to the lowest since early October, with Japan and Hong Kong underperforming and travel shares among the biggest decliners. U.S. and European futures fell and the 10-year Treasury yield dropped to 1.57%.
The World Health Organization and scientists in South Africa are studying the recently identified variant, which has been described as very different to previous versions and of serious concern. The U.K. will temporarily ban flights from six African countries. Hong Kong confirmed two cases of the strain. The dollar was near a 16-month high, while the Rand weakened and other commodity currencies retreated. Crude shed 2.5% and gold rose. U.S. markets were closed yesterday for Thanksgiving and will have a shortened Black Friday session today.
The JSE closed little changed yesterday after SA researchers announced the discovery of a new strain of Covid-19 and investors studied the minutes of the US Federal Reserve’s most recent meeting. The JSE Top40 closed 0.17% lower, MRP was the out performer closing up 3.95% while the mining stocks were the big losers with GLN, BHP and AGL all closing down over 2 percent. The ZAR has lost a further 2.49% this morning trading at R 16.23/$ and R 21.59/GBP, we in for a tough day as ASIA trades lower, US Futures under pressure and Tencent is down 3.22%. IG Top 40 is down 757 points.
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European stocks closed higher as investors continued to monitor political developments and the Covid crisis. The pan-European Stoxx 600 closed up by 0.4%, with utilities stocks rising 1.8% to lead the gains as most sectors and major bourses entered positive territory. On the data front, Germany’s third-quarter gross domestic product (GDP) grew by 1.7% quarter-on-quarter, fractionally below expectations, official statistics revealed Thursday. Germany’s GfK consumer sentiment barometer showed that spiking inflation and the surge in Covid-19 cases is weighing on consumer morale heading into December. The survey fell to -1.6 points from a revised 1.0 in November.
US closed for thanksgiving and half day today.
Asian markets are lower across the region with the Nikkei leading the way lower down 2.87% as fears of a new Covid variant weighed on investor sentiment. The Hang Seng is down 2.31% with Tencent down 3.22%. The S&P/ASX 200 in Australia fell 1.79%. Australia’s retail sales in October jumped 4.9% month-on-month, seasonally adjusted, according to official estimates released today. That was far higher than the 2.5% increase predicted in a Reuters poll. The Aussie Mining Index is down 1.87% with RIO and BHP down 2.46 and 1.61 percent respectively. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.45% lower.
Oil prices are more than 2% lower on concerns that a global supply surplus could swell in the first quarter following a coordinated release of crude reserves among major consumers, led by the United States. U.S. President Joe Biden’s administration announced plans on Tuesday to release millions of barrels of oil from strategic reserves in coordination with other large consuming nations, including China, India and Japan, to try to cool prices. The Economic Commission Board (ECB) expects a 400,000 barrels-per-day (bpd) surplus in December, expanding to 2.3 million bpd in January and 3.7 million bpd in February if consumer nations go ahead with the release, the OPEC source said. Brent – 2.36% $ 80.28, WTI – 2.99% $ 76.06.
Gold is firmer this morning on the new Virus concerns but is still set for its worst week in five months as bullion has been hammered by increasing bets that the U.S. Federal Reserve would accelerate the pace of stimulus tapering and raise interest rates sooner to curb rising inflation. The metal has declined more than 2.8% this week, heading for its worst week since June 18. Gold + 0.38% $ 1796, Platinum – 1.46% $ 984 and Palladium + 0.55% $ 1874