health workers wearing face mask

News about a new Covid-19 variant, known as B.1.1.529, is causing a strong risk-off move in markets to close out the week. Overnight, news of the UK putting six South African countries on the red list has seen the FTSE 100 dip 3%, with USD/ZAR up 2.1% and the UK 2yr Gilt yield down 20% to 0.46%.

We add that due to Thanksgiving in the US, liquidity is lower, meaning that moves can become a lot more choppy than normal market conditions.

For the moment, we prefer to wait for more information over the course of today and the weekend to understand how serious this variant could be before putting on any long/short positions.

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