The herd refuses to be corralled
December 22, 2020SharePrint
Investor jitters over UK Covid mutation boosts US dollar
Asia managed to dodge the worst of the risk-off move overnight, heading home before the panic set in during European hours. As countries queued up to close borders with Britain over its mutated strain of Covid-19, investors hit the panic button. Equity markets were slammed, along with energy and precious metals as investors flocked to the safety of the US dollar and US treasuries.
US markets started off in much the same tone. However, the emergence of the US stimulus bill and government funding bills proved just too juicy a morsel for the dip-buying FOMO herd to ignore. By the end of the session, US equities had recovered most of their losses, as had precious metals and currency markets. The charts show massive ranges across almost every asset class, but very little directional substance.