Markets still under the influence of the omicron

The dollar index stabilized above 96 points on Tuesday. Investors still seem to calculate concerns about the variant omikron and their impact on possibly higher interest rates in the United States.

Raphael Bostic, president Federal Reserve in Atlanta, he was the last of a growing number of Fed officials to declare openness to accelerating the pace of tightening the quantitative easing program. He expressed the hope that the momentum of the US economy would carry it through the next wave of the pandemic. He also confirmed the possibility of at least two interest rate hikes next year, if inflation remains high. By contrast, Morgan Stanley does not expect any interest rate hike in the US in 2022.

The United States does not take the omicron lightly

Jerome PowellFed chairman said on Monday in the US Congress that the coronavirus omicron variant poses a threat to the economy, referring to the risk of falling employment and economic activity and the increased uncertainty for inflation.

The uncertainty related to the new coronavirus mutation may strengthen the statement by Stephane Bancel, Moderna's CEO, in the Financial Times.A representative of the medical concern has signaled that existing vaccines will be less effective in combating the omicron variant.

Fall in stock and oil prices

Na oil market oil and futures contracts seems to be selling off.

Futures on popular stock indices like DAX or S & P 500 are losing more than 1 percent, while the Japanese Nikkei has slumped by more than 2,5 percent. The price of a barrel of WTI crude oil drops to $ 67 and the Brent oil price drops to $ 70. In the latter case, the price is more than $ 10 lower than last week.

Expectations remain valid OPEC + in January, plans to increase oil supplies will be put on hold. This may be due to the uncertainty about the omicron variant and its likely impact on the world economy and fuel demand. This option may raise concerns about further roadblocks and restrictions on travel, as well as concerns about the projected excessive surplus of oil early next year after the release of strategic reserves by the countries that are the largest consumers of the raw material. Analysts say that such a development could easily justify a stoppage of production or even a slight cut in production by OPEC +. Traders are also monitoring the possibility of Iranian oil returning to the markets after positive comments from diplomats who resumed talks on the Iranian nuclear deal on Monday.

Time of safe foreign exchange havens

Uncertainty in the markets and increased volatility may persist until more information is released about a new variant of the coronavirus. Currently, the Swiss franc and the Japanese yen seem to be safe havens along with US Treasury bonds, and the pressure may fall on commodity-linked currencies. It can look interesting in such an environment next Fed decisionwhich we will meet in a dozen or so days. It is also then that the latest macroeconomic projections will appear, which may refer to the rate of interest rate increases in 2022.