After what seemed like a quiet week, financial markets exploded into life as the threat of a new Coronavirus mutation, called B.1.1.529, emerged from southern Africa. This sent markets into a tailspin on Friday morning with major implications. Stock markets retreated heavily, yields were dramatically lower on government debt and traders sought out safe-haven currency assets. The yen, which is normally seen as the safest currency, rose 0.6% against the dollar. Whilst the pound traded 0.7% lower versus the euro.
Markets remained volatile with the Volatility Index (VIX) spiking 41% with a great deal of uncertainty remaining over the new strain. Scientists suggest the new strain has a high number of mutations in its spike protein, which plays a key role in the virus’ entry into the body’s cells. Researchers are still trying to determine whether it is more transmissible or more lethal than previous strains.
The UK has responded by banning incoming flights from six African countries and other nations have issued similar policy methods in response to the new threat. The World Health Organisation (WHO) has called a meeting on Friday to try to determine if the new stain will be officially appointed a new variant of concern.
Economic Calendar:
- Tues 30th Nov 05:00 EUR CPI (YoY) (Nov)
- Wed 1st Dec 04:30 UK Manufacturing PMI (Nov)
- Fri 3rd Dec 04:30 UK Composite PMI (Nov)
Fri 3rd Dec 04:30 UK Services PMI (Nov)
