Hong Kong: Asian markets were mixed on Thursday, with oil prices rising slightly. Traders are still trying to make up for the latest losses caused by Omicron, but Wall Street is still full of uncertainty after the late collapse after the first case was reported in the United States.
The news that a patient was infected with a new variant made American investors shudder. They fear that the authorities will be forced to re-implement strict containment measures or even blockades, thereby undermining the recovery of the world’s top economies.
Previously, it was widely believed that the Fed would end its huge bond purchase financial support program sooner than expected, and start raising interest rates next year to prevent inflation from getting out of control — currently at a three-year high —.
Traders have been uneasy in recent weeks due to concerns about supply chain chaos, soaring energy costs and labor shortages leading to sharp increases in global prices.
Omicron’s announcement-and the warning that the vaccine may be ineffective against it-put them in trouble on Friday.
Although experts say that it will take several weeks to fully understand the true dangers of Omicron, the market is highly sensitive to any negative news about the crisis, and the VIX volatility indicator is at its highest level since early February.
At the same time, the major industrialized countries of the Organization for Economic Cooperation and Development (OECD) warned that the pressure of variation threatened global recovery and lowered their growth prospects for this year.
Disturbance on the New York trading floor was evident on Wednesday, when the announcement of pressure at that time caused losses in all three major indexes and was in a positive zone for most of the day.
“The Omicron variant is the number one uncertainty facing the U.S. economic outlook,” said Kim Mundy of the Commonwealth Bank of Australia.
Tokyo, Shanghai, Sydney, Singapore, Wellington and Jakarta all fell, but Hong Kong, Seoul, Taipei and Manila rose.
Later in the day, we will focus on the latest meetings of OPEC and other major suppliers. They will discuss plans to increase production each month to help calm prices. The possible impact of Omicron on demand may be a major topic.
As the United States and other major consumer countries, including China, decided to release some foreign exchange reserves, the group has proposed the possibility of suspending interest rate hikes.
Both main crude contracts rose Thursday, though they remain well below their levels from a week ago before they tanked more than 10 percent in reaction to the Omicron announcement.
“The arrival of the Omicron variant and the ensuing sell-off obviously increases the odds that OPEC+ will opt to hit the pause button,” Helima Croft of RBC Capital Markets said.
Investors are also waiting for the US employment data to be released on Friday, which will provide the latest snapshot of the state of the world’s top economies.