The title may sound a little optimistic, but in fact it is not. Many countries are recording records of new cases, even despite the large number of people vaccinated. Despite the fact that a new variant of the coronavirus is now taking over and spreading as fast as no other, Monday's falls are now just a memory. The indices are once again scoring strong gains, raising hopes again for an end-of-year rally.
The indices in Europe gained more than 1% today in most cases. On Wall Street, the gains were also significant and also exceeded 1%. In the case of Germany and the UK we will not have new restrictions before Christmas, but they can be expected after Christmas. WHO reports that many health systems will reach their capacity limits by Omicron. Nevertheless, market sentiment is good, which may indicate that the market is slowly getting used to risk.
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Create account Try a demo Download mobile app Download mobile appGold has been in retreat today and is diving below $1,800 on the back of a strong rise in yields. However, it is worth mentioning that the last days of the year, from December 23 to January 3, usually brought at least 1% gains.
However, it is not very negative. Novavax's new vaccine has been approved for use in Europe. In turn, yesterday Moderna reported that 3 doses of the vaccine are expected to be effective against Omicron, which may give hope against a potential economic collapse. Indices and oil returned to gains after this news. Yesterday Brent returned above $70, and today we have such a move on WTI oil.
It is impossible not to mention the Turkish lira, which yesterday and today strengthened due to the announcement of the stabilization of the currency by new measures announced by Erdogan. The Turkish currency has been in a real slump for the past month. The currency has fallen by almost 50% against the dollar and the euro. The reasons are well known - the complete politicization of the central bank and the loosening of monetary policy against not only global trends, but above all against rising inflation. Naturally, the market's response attracted speculative capital and this is the key to explaining why the USDTRY pair saw a drop from 18.30 to 11.0 in just 12 hours! The trigger was the Turkish President's plan to prevent further dollarization, the flight of domestic savings from the lira. Erdogan announced that savers would be compensated for the weakening of the lira beyond interest.
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