Daily summary: Resurgence of Covid-19 weighs on global markets

• Negative sentiment in Europe 
• Mixed moods on Wall Street 
• Austria introduces lockdown on Monday
• FED Clarida comments put pressure on precious metals

European indices fell from record highs and finished today's session lower as increasing inflation and pandemic concerns weighed on market sentiment. Austria decided to impose a nationwide lockdown, starting from Monday. Moreover, Austrian authorities announced that vaccinations will become compulsory from February 2022. Neighboring Germany warned it may follow suit, raising fears of another step backwards in global economic activity. Bank shares were among the worst performers, down 2.2% after the ECB President again repeated that the central bank should not tighten monetary policy and reinforced the idea that inflation remains temporary and mostly driven by supply shocks. Still for the week, European bourses booked small gains.

Mixed moods prevail on Wall Street, where Dow Jones fell to the lowest level since October 27th as stocks benefiting from normalcy like cruise operators, airlines, and economically sensitive stocks like energy, financial, and industrials are trading under pressure. Meanwhile, the S&P 500 managed to erase most of the early losses while Nasdaq reached another record level as rotation to tech companies continues. Still, strong corporate results and economic data continue to show that the American economic recovery remains robust. More than 90% of the S&P 500 companies have already reported their quarterly results of which over 80% of them posted better than expected earnings, according to Refinitiv. On the week, the Dow is down 0.6%, its second weekly loss while the S&P 500 is up 0.5% and the Nasdaq added 0.8%. Investors are also keeping an eye on President Joe Biden’s pick for the next Federal Reserve chair, which he is expected to unveil early next week.

WTI crude price fell over 3.0% and Brent crude futures fell more than 2.80% amid strong dollar and resurgence of Covid-19 which weakens demand outlook. Also, the US asked other major oil consumers like China, India, Japan and South Korea to consider a coordinated release of oil reserves to bring prices down, according to Reuters.  Elsewhere gold price fell nearly 0.50% below $1,850 an ounce and silver lost 0.60% and is trading above $24.60 following hawkish comments from FED Clarida which supports the idea of speeding up the taper process. The downward movement on the cryptocurrency market lost its momentum during today's session. Bitcoin is currently testing $ 57,800 level, while Ethereum is approaching resistance at $ 4,300.

Early in the session WTI crude (OIL.WTI) price bounced off the earlier broken lower limit of the downward channel and broke below the major support at $76.60 which coincides with 38.2% Fibonacci retracement of the upward wave launched in August 2021. If current sentiment prevails, next target for sellers is located at $71.10 and is marked with 61.8% Fibonacci retracement. Source: xStation5