Yields, Euro Stoxx 50 Futures tumble as Omicron risks escalate

• US 10-year Treasury yields renew three-week low, Euro Stoxx 50 Futures slump 2.5%.
• Moderna Chief renews concerns over global vaccines’ inabilities to tame South African covid variant, Fed funds rally.
• Fed’s Powell, US CB Consumer Confidence eyed for fresh impulse.

Market’s cautious optimism for the South African coronavirus variant turned out ephemeral as risk catalysts slump heading into Tuesday’s European session.

That said, the US 10-year Treasury yields drop seven basis points (bps) to refresh the lowest levels in three weeks while the Euro Stoxx 50 Futures drop 2.70% as bears attack 4,010 level by the press time.

While checking the fresh catalysts, comments from globally renowned covid vaccine producer Moderna’s Chief Stéphane Bancel will gain major attention as markets previously cheered hopes of proper vaccines to overcome the fears from Omicron.

“The chief executive of Moderna has predicted that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19 and warned it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale,” said Financial Times.

Following the news, Fed funds futures rally while the MSCI emerging markets index falls about 0.8% to a one-year low.

Earlier in the day, investors cheered US President Joe Biden’s rejection of the need for lockdowns and comments from Fed Chairman Jerome Powell and US Treasury Secretary Janet Yellen. Powell stayed intact on his inflation view, offering notable support to risk appetite whereas Yellen pushes Congress to overcome the US debt limit deadlock, as well as highlighting the strength of the US economy.

Moving on, preliminary readings of November’s Consumer Price Index (CPI) will precede US CB Consumer Confidence for November and covid updates, followed by Fed Chair Jerome Powell’s testimony, to direct short-term market moves.

Read: Yields, S&P 500 Futures portray cautious optimism, coronavirus variant is the key