Risk aversion pressure is predominant while Omicron strain is spreading

Yesterday, the second case of Omicron strain infection was reported in Japan. Subsequently, the first infected person has been confirmed in the United States. US stocks have turned down and US bond yields have also fallen. NY crude oil futures fell again to around $ 65. In the foreign exchange market, it is a typical risk aversion market where the strong yen and the strong dollar coexist.

However, the dollar market cannot be said to be a return to the strong dollar trend. It seems that the movement is limited to the movement associated with the appreciation of the yen for risk aversion. The dollar index has been on a downward trend since the beginning of December. There was a scene where FRB Chairman Powell’s hawkish remarks triggered dollar buying, but uncertainty about Omicron stocks has raised some doubts as to whether the rate hike will really be accelerated.

In any case, it is difficult to draw a reasonable scenario when the expansion of Omicron strains is still unclear. The market is likely to swing nervously for a while.

I should have been able to make an assumption, but with the appearance of an actual infected person in the United States, there is a tendency to avoid risk again. However, according to Powell’s remarks the other day, it is assumed that even if the USD falls, the decline will gradually slow down.

Crude oil is the easiest to drop. As in Japan, the demand for crude oil is declining as international flights are no longer flying worldwide. From here, I thought that CAD, which is strongly linked to the crude oil price, would easily fall, so I decided to sell CAD JPY again.

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