LONDON Reuters Riskaversion ruled on Monday as a surge in worldwide coronavirus cases drove down bond yields and left stocks facing their longest losing streak since the pandemic first hit global markets 18 months ago.
Summer markets were suddenly stormy. Europes STOXX 600 saw its worst morning in two months and Londons FTSE fell over 2 as Britains freedom day when it lifted COVID restrictions was overshadowed by its doublejabbed health minister contracting the virus.
Asia had seen Japans Nikkei and Hong Kongs Hang Seng drop 1.3 overnight too. Cases hit an 11month high at the weekend in Singapore. Thailand had its highest singleday increase since the pandemic began and Sydneys construction workers were told to down tools after cases rose there as well.
Wall Street futures down nearly 1 .N although it was good news for those holding safehaven government bonds GVDEUR or the dollar, which climbed to a more than threemonth high. FRX
Natwests Global Head of Desk Strategy, John Briggs, said the chances of broader lockdowns being needed again were growing and also Chinas economy was slowing, meaning a recent surge in commodity prices could be peaking although oil is now expensive enough to be a weight on many economies.
Where all this comes out of the wash for me is that with this narrative gaining traction, it is clearly more bullish for the U.S. dollar, Briggs said.
He said that if COVID19 cases rise again, factors to consider included which countries have the…