Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Asia Markets Plunge In New Covid Variant Concerns

By CMC Markets (Michael Hewson)Market OverviewNov 26, 2021 06:18
Asia Markets Plunge In New Covid Variant Concerns
By CMC Markets (Michael Hewson)   |  Nov 26, 2021 06:18
Saved. See Saved Items.
This article has already been saved in your Saved Items

After what was a fairly lacklustre session yesterday, European markets closed the day higher, despite concerns about how the new German government will deal with the continued surge and hospitalisations and deaths that are rippling out across the country.

This fairly subdued tone has been replaced in Asia trading this morning by a huge sell off on concerns over a new more transmissible variant of the coronavirus identified in South Africa, and which has also been detected in Hong Kong. This variant which, it is understood, contains up to 30 identified mutations, has prompted WHO officials to call an emergency meeting to discuss what it means for vaccine efficacy as well as other treatments. The new strain has also prompted the UK government to implement flight bans from six African countries over concern as to what this might mean for infection rates, and other ripple out effects.

For the moment it is understood that the number of cases is small, but due to the thin liquidity levels in Asia trading as a consequence of the US holiday the reaction does appear to be outsized, with a surge into bonds, sending yields plunging, and gold higher.

Back in Europe concerns about this new variant are the least of governments’ worries at the moment, with outgoing German Chancellor Angela Merkel calling in vain for further restrictions to be implemented, however, there appears to be little in the way of coordinated policy at a central level to stem the spread of the virus. Incoming Chancellor Olaf Scholz insisted that the new government’s priority is dealing with the crisis, yet seems unwilling to take any further steps apart from the ones taken at the start of the week.

Germany sadly isn’t alone in dealing with a resurgence of the virus, with Italy announcing tighter restrictions along with the Czech Republic and Portugal in the last couple of days.

The deteriorating virus situation in Europe is also being reflected in the recent decline in the euro which is set to post its third successive weekly decline, trading back at levels last seen in the summer of 2020. While part of this is down to weakness against the resurgent US dollar, the decline in the euro has also been reflected against the Swiss franc where it hit a six year low earlier this week.

The rise in the US dollar could start to become a problem as concerns over rising inflation open up the prospect that the Federal Reserve might look at speeding up the pace of the tapering of its bond buying program, when they next meet in December.

In the absence of US markets yesterday, markets in Asia have fallen like a stone, with today’s European open set to see a similarly weaker open, as investors attempt to absorb what this new variant might mean for vaccines, treatments and government restrictions.

EUR/USD – remains in touching distance of the June 2020 lows and the 1.1160/70 area. For the downside pressure to diminish we would need to see a push back above the 1.1400 area. A move below 1.1150 could trigger further losses towards 1.1000.

GBP/USD – continues to slip lower with the bias still for a move towards 1.3160, while below the 1.3500 area. We need to gain a foothold above the 1.3500 area and kick on through the 1.3520 area to open up the 1.3600 area.

EUR/GBP – continues to find resistance near to the 0.8440 level, and while below the risk is for a move below 0.8380 and a move towards 0.8280. Above 0.8440 targets the 0.8480 area.

USD/JPY – while above the 114.50 area the potential remains for a move towards the 116.00 area and then on to the December 2016 peaks of 118.60. A break below the 114.50 level undermines this scenario.

"DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. "

Original Post

Asia Markets Plunge In New Covid Variant Concerns

Related Articles

Asia Markets Plunge In New Covid Variant Concerns

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The inherent concept of such investments means that they are not suitable for the investor seeking income from such investments, and are only suitable for those who have the required experience and understand the market risks. You should carefully consider your investment objectives, level of experience, and seek advice from an independent financial advisor if you have any doubts.
Continue with Google
Sign up with Email