New Covid-19 mutant has Europe on edge
- Markets this week may be impacted by a new Covid-19 strain, which has been discovered in the UK, and is apparently much more contagious than the strain currently known.
- However, the new mutant apparently causes the same symptoms and is most-likely not immune to the vaccines currently being deployed.
Bitcoin smashes all-time high
- The world’s largest cryptocurrency finally reached the $20,000 mark last week, but didn’t stop there.
- Over the weekend, Bitcoin reached as high as $24,000.
- Demand continues to outstrip supply as institutions continue to buy in. MassMutual, the Massachusetts insurance firm dipped its toes into Bitcoin with a $100 million purchase recently.
- UK-based Ruffer Investment confirmed a Bitcoin buy of $744 million on Thursday.
- Microstrategy confirmed that they have managed to secure $650 million for a further bitcoin buy.
Fed keeps Wall Street bullish
- All three major indices, DJ30, SPX500 and NASDAQ100, registered fresh all-time highs throughout last week.
- On Wednesday, the Federal Open Market Committee, led by Chair Jerome Powell, outlined its future monetary policy.
- As expected, Powell reassured investors, saying the Fed will continue to buy QE assets “at least” at the current level of $120 billion, namely $80 billion in government bonds and $40 billion in mortgage securities each month.
- GDP outlooks were revised upwards, saying it would fall 2.4% this year, before rebounding 4.2% next year.
- Over the weekend, US lawmakers were able to reach a $900 billion stimulus package, preventing a government shutdown.
Oil near a 10-month high
- Oil prices rose steadily throughout last week, as countries around the world began distributing Covid-19 vaccines.
- In anticipation of markets reopening in the near future, demand is expected to grow, which led oil to climb above $49.
- A surprise drawdown in US oil reserves on Wednesday also contributed to the rise in the black gold’s price, as it reached its highest level since late February. However, oil corrected to start the week on the new Covid-19 strain.
Brexit is just around the corner
- After more than four years of anticipation, deliberation and negotiation, the divorece between the UK the EU will finally go into effect on December 31st.
- Despite many efforts and extensions, the scenario of a “no-deal Brexit” seems increasingly likely.
- EU chief negotiator Michel Barnier commented that there were “just hours to salvage an agreement.”
- At time of writing, there was no deal declared.
The Week Ahead
- Thursday: Bank holiday in Europe and Australia
- Friday: Christmas day (Wall Street closed)
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.