Emergency: on November 25, 2021, South African scientists announced the discovery of a new variant of covid-19 strain B.1 1529。 For financial markets, the outbreak of the epidemic on Friday set off a bloodbath. The three major indexes of US stocks fell across the board, the ten-year US bond yield plunged sharply, falling below 1.5%, and crude oil fell by more than 10%. The main impact of the epidemic on the market is as follows: 1. The expectation of interest rate increase by the Federal Reserve was postponed. In the early stage, the market generally believed that July 2022 would be the time point for the first interest rate increase, and it is currently expected to be postponed to the end of the year; 2. Global demand weakens. With the outbreak of the epidemic superimposed and the global economic blockade implemented again, the subsequent economic demand will weaken. After the rebound of the epidemic, we believe that the global market will still face large fluctuations in the short term, inflation expectations will decline rapidly, crude oil will further decline, US bond yields will continue to decline, and the global stock market will continue to be under pressure due to the upward risk aversion of gold.
Global stock markets: South Africa's new variant virus triggered a sharp decline in the global market, and the three major indexes of US stocks fell sharply. The NASDAQ index fell the most last week, up to 3.52%, the S & P 500 fell slightly by 2.2%, and the Dow index fell 1.97%. European stocks fell more than U.S. stocks. The FTSE 100 fell relatively small, down 2.49%, France closed down 5.24%, and Germany fell as much as 5.59%. In Asian stock markets, the Nikkei closed down 3.34%, South Korea fell 1.16%, and the Hang Seng Index fell significantly, reaching 3.87%. Emerging markets fell across the board, while Brazil fell only 0.79%, India index fell 4.24%, and Russia fell 5.12%. MSCI index fell across the board, with MSCI in developed markets falling by 2.64%, emerging markets falling by 3.02% and Asia Pacific region falling by 2.71%. The number of initial claims for unemployment benefits in the United States unexpectedly recorded 190000, the lowest level since the epidemic, resulting in the market's original expectation of raising interest rates in the United States in advance. However, the harm and spread of the mutated virus in South Africa are very strong, causing turbulence in the global market. The global stock market is expected to decline further next week.
Bond market: due to the mutant strain, the market's expectation of the Federal Reserve's interest rate hike immediately weakened, and the ten-year US bond yield quickly fell to 1.48%, with obvious pressure above us long-term bonds; German bond yields were basically flat, rising slightly by 9 BP to 0.29%, and Japan's 10-year bond yields were basically maintained at o.o9%. The yield of two-year US bonds was basically flat, down 2 bps to close at 0.5%, and the US bond term spread was reduced by 4 bps to 0.98%.
Foreign exchange market: the US dollar index rose sharply and fell, finally closing at 96.064. Both the Australian dollar and the British pound depreciated significantly against the US dollar. The Australian dollar fell by as much as 1.62%, the British pound fell by 0.79%, the euro closed up slightly by 0.33%, the Japanese yen rose slightly by 0.57% against the US dollar, and the RMB depreciated slightly against the US dollar by 0.o9%. Affected by the epidemic, the dollar index fell somewhat.
Commodity market: the commodity market fluctuated sharply last week. For precious metals, the expected rise in interest rates in the first half of the week led to the rapid decline of gold, but the epidemic repeatedly led to the recovery of market risk aversion. Gold returned above US $1800 again, with a weekly decline of 3.24%, and silver continued to decline, with a decline of 4.66%, to close at US $23.63/ounce. LME copper rose by 1.14% to close at US $9761, while US crude oil rebounded slightly, up as much as 3.49%, and finally closed at US $78.32. The overall commodity performance is differentiated, and the subsequent epidemic ferments or increases the volatility of the commodity market.
