AUD/JPY bears in charge into the 80.70s in risk-off markets

• AUD/JPY bears stay in charge in risk-off markets conditions. 
• The forex space's risk barometer is heading lower by some 0.3%.

AUD/JPY is sinking at the start of the week as risk-off tones continue to reverberate following Friday's sell-off on Wallstreet. At the time of writing, AUD/JPY is down some 0.3% and has fallen from within a range of between 80.73 and 81.04.

US stocks sank on Friday following news of the latest spike in COVID-19 cases which weighed on the economic outlook. The S&P 500 fell 1% to 4,620.64, finishing 1.9% below last Friday's record close and the futures are off by the same amount in Asia. 

Covid risks weigh on risk sentiment

The Omicron variant is "spreading at lightning speed" in Europe and medical experts have warned of an Omicron-fueled “viral blizzard” sweeping the US also. US president Joe Biden has spoken of a “winter of severe illness and death” among the unvaccinated.

The Omicron variant of Covid-19 has “extraordinary spreading capabilities”, the top US infectious diseases expert said on Sunday, and promises to bring a bleak winter as it continues “raging through the world”.

A new single-day record for New York state was reported of just over 21,000 new COVID-19 cases on Friday. Additionally, the consumer response to omicron's spread in the UK suggests the US services sector is going to be for a poor time as well despite the holiday season.

Besides the covid risks, a hawkish Federal Reserve and central banks could also be weighing on risk sentiment and this week's US inflation data will be watched. ''We expect slowing ahead, but core PCE prices likely rose strongly again, albeit by less than the core CPI (0.42% vs 0.53%),'' analysts at TD Securities said.