European open: Fear of new COVID variant grips risk sentiment

London (Nov 26)  Gold is trading 0.80% higher overnight after fears of a new COVID-19 variant grip the markets. Silver is also trading 0.29% higher at $23.64/oz. In the rest of the commodities complex, copper has dropped -1.50% and spot WTI -3.62%.

Risk sentiment in the Asia Pac area was very weak. The Nikkei 225 (-2.53%), ASX (-1.73%), and Shanghai Composite (-0.56%) all dropped heavily overnight. Futures in Europe are also indicating a significant fall on the cash open. 

In FX markets, there were some big moves. AUD/USD fell -0.84% and USD/JPY also fell around the same amount. In the crypto space, BTC/USD has also fallen nearly -3%.

News from overnight:

There is a new covid variant that would be called Nu as the WHO schedules a special meeting to discuss its implications.

RBNZ's Hawkesby: We need to lean against domestic price pressures.

Japan reportedly is to tighten its borders for South Africa, five other nations on the new COVID-19 variant.

Angela Merkel raised the prospect of new EU sanctions if tensions with Russia and Belarus don’t subside.

Germany October import price index +3.8% vs +2.1% m/m expected.

Australia Oct retail sales +4.9% vs 2.5% expected.

Tokyo CPI overall CPI +0.5% y/y vs +0.1% prior.

Looking ahead to today's session highlights include EZ money supply, comments from ECB's Lagarde, Schnabel, Panetta, and BoE's Pill.

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