Risk is rebounding on the day after fears surrounding the Omnicron virus strain battered markets on Friday amid thinner liquidity conditions.
There is a light bounce back so far today but it doesn’t take away the damage done at the end of last week. As the Omincron variant spreads across the globe, expect that to keep a lid on optimism as it is causing market participants to reassess the global outlook.
It will all boil down to how serious of a threat the Omnicron variant really is and there might not be any easy answers on that over the next few weeks. But as the virus strain is being identified in more and more places around the world in the meantime, that might keep markets a fair bit more jittery.
German and Spanish inflation will be the more notable data releases today but it will be all about the market mood as US traders return from the somewhat long weekend.
Trader Aleksandar Kumanov