Black Friday will not be limited to deals at retailers as the designation also applies to global risk sentiment today.
Overview
Global equities from Asia to Europe are in free fall on fears that a new strain of Covid-19 will derail the global recovery. European equities are down over 3.0% and Asian stocks are set for their biggest decline since March. The World Health Organization and scientists in South Africa are working at “lightning speed” to figure out how fast the B.1.1.529 (South African) variant can spread and if it is more resistant to vaccines. The European Union is moving to halt air travel from southern Africa and other governments are expected to implement new measures as well.There is no economic data on today’s docket so eyes will remain on global equity markets. Liquidity is usually thin on Black Friday, especially later in the day when Europe heads home for the weekend. Expect choppy moves today.
What to Watch Today…
- No major economic events scheduled for today
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CAD
Commodity-based currencies are also in a free fall this morning as the price of commodities plunged with global equities. WTI oil fell to 73$ a barrel, well off the $85 a barrel seen earlier this month. Metals such as copper, nickel, and aluminum are all lower today as well. The Canadian dollar lost 0.9% and touched the highest rate since late September. The South African rand fell 1.3%. The Aussie and Kiwi dollars were over half a percent lower.
MXN
The Mexican peso continued its major collapse against the U.S. dollar overnight, losing another 1.3% before recovering some. Earlier in the week, AMLO’s nomination for Banxico’s governor was seen as a dovish move and weighed on the currency. In the near term, it appears the peso will continue to suffer amid a flight to quality as the new Covid strain threatens global growth.Despite a modest recovery from overnight lows this morning, the Mexican peso is down over 5% over the last ten days.
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