LONDON, December 1, Reuters - The discovery of a new Omicron coronavirus variant towards the end of November has sent markets tumbling, the culmination of a volatile month for almost every asset class in the world.
With new selling across confidence-sensitive asset classes, Moderna's head of drugmaker warned that current vaccines are unlikely to be as effective against Omicron, making for a painful end of the month for markets.
Below is a series of charts showing the main moves.
Roughly $2 trillion has been wiped off the value of MSCI's 50 country world stocks index since November Rising COVID 19 case numbers and moves by countries such as Austria and the Netherlands to impose restrictions were warnings but the selloff accelerated on Friday after South Africa identified the new Omicron strain.
An attempted bounce on Monday was quickly wiped out on Tuesday after comments from Moderna CEO and warnings that it could take 3 -- 4 months to rework vaccines.
European travel and leisure stocks have suffered its biggest monthly fall since the COVID 19 first hit world markets in March 2020, according to Omicrom. The Refinitiv Global Airline index has fallen back to levels last seen a year ago, and they have lost 20% in November.
Oil prices are now down 15% for the month, which is also the worst month since the COVID rout. It comes after a more than 400% surge in prices since that trough.
Money markets, which had grown up expectations of how much global policymakers will raise interest rates next year, whittled down when news of the Omicron variant emerged, only to partially restore them after hawkish comments by Fed boss Jerome Powell.
They price the United States to start raising rates from July 2022, after they backtracked earlier in September 2022. There were bets on June at the beginning of last week.
According to Refinitiv data, traders now expect only a 50% probability of a 0.15% hike from the Bank of England on December 16 compared to a 80% probability last week. In Europe, markets don't believe that the ECB will increase interest rates next year.
After three months of sustained selling, the scramble to safety has seen ultra-safe government bond rally strongly, on the theory that major central banks will have to delay plans to raise interest rates again.
Germany's 10 year bund yield is down about 25 basis points this month, which is one of its biggest monthly drops of the past two years.
The ten-year U.S. Treasury yields, the main propellant of global borrowing costs, will end the month about 14 bps lower. That would be the end of three straight months of rises. Britain's 10 year gilt yield has fallen 23 bps in its biggest monthly drop since January 2020.
Emerging markets have been battered by renewed COVID concerns and dollar strength, but also by idiosyncratic problems in a handful of big countries.
Turkey's lira fell by almost 25% in November, a crisis that was largely caused by its own. The central bank cut interest rates for the third time in a row, even as inflation went to 20%.
Another big mover was South Africa, where Omicron was first detected. The rand has slumped more than 6% against the dollar this month. Omicron saw Thailand's tourism-reliant baht drop 1.5%, bringing year-to-date losses to 11%.
An emerging equity index has sank 4% to approach one-year lows, reaching a new all time low of 4%.