Moderna’s CEO stated that the Omicron strain of the virus is resistant to existing vaccines

On Monday, the US stock indices closed on a positive note but began a sharp decline today amid news that the Omicron strain of the virus is resistant to existing vaccines. According to the WHO, the probability of further global spread of the Omicron coronavirus strain is high.

Many analysts already agree that stock markets are no longer in fear of stimulus cuts and interest rate hikes at the moment. Because of the Covid-19 “sudden” mutations, stimulus cuts and rate hikes can be delayed – indicating that inflation will continue to rise over the medium term.

Japan and Israel were among the last countries that closed their borders to foreign travelers after the WHO officially recognized the Omicron virus variant as a global risk. No Omicron-related deaths have been reported, but more than 10,000 cases have been reported in South Africa this week.

Yesterday, Fed Chairman Jerome Powell said that the Omicron strain is creating more uncertainty for the inflation outlook. This could slow progress in the labor market and strengthen problems in supply chains in turn. The Fed will use all tools to strengthen the economy and the labor market and ensure that higher inflation does not occur. At the same time, Mr. Powell hinted that inflationary pressures will continue next year.

OPEC+ postponed monitoring meetings to assess the impact of the new coronavirus strain on oil. Oil prices continued to decline at the opening of trading Tuesday on news that a new variant of the Omicron virus is resistant to vaccines. This adds to fears that there could be an excess of supply in the first quarter of next year.

Asian stock markets fell sharply in late trading today as investors fear that the Omicron variant could cause broader global economic shocks. Japan’s Nikkei Index (JP225) decreased by 1.63%, Hong Kong’s Hang Seng Index (HK50) lost 1.8%, while Australia’s ASX 200 (AU200) added 0.22% as the Australian dollar declined sharply as a risk category currency. As a rule, major country indices are inversely correlated with the exchange rate of the nation’s currency.