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The feeling gets worse

The more the market learns about the latest covid variant, the more it worries.

US 10-year yields are now down 8 basis points to 1.567%. Just Wednesday, the Fed’s Daly dropped a bomb by hinting at support for a faster cut, but that could quickly be off the table.

USD / JPY is down 68 pips to 114.67 and yen crosses are down significantly more, led by AUD / JPY, which is down 108 pips to 81.83. That chart doesn’t look pretty as it falls into a tech support chasm.

I suspect these moves will disappear without any additional information on the variant. After all, this is based on an increase in South African cases and genomic sequences of less than 100 cases.

But as I wrote today, if you’re going to panic, it’s better to panic sooner than later.

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