Global Markets Inch Higher, Crypto Space Suffers a Setback
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- European markets rise despite a weekly record of new Covid-19 cases
- The cryptocurrency market wobbles on Monday after a weekend sell-off
Monday morning global markets looked mixed and seeking direction. The Asian session closed relatively unchanged, followed by a positive opening for the European markets. A little upside was seen at the start of the European session as major indexes moved mildly higher.
Part of the narrative to kick off the week is the renewed wave of Covid-19 infections at some places, worsening the global virus situation. A number of emerging market countries, including Brazil and India, have registered a new spike in coronavirus cases. In the Western world, particularly the US and the UK, vaccinations have been successfully rolling out, and as a result, the US and the UK economy are gradually reopening.
European markets spiked to the upside by about 0.20% today despite an uptick in global coronavirus infections. Global coronavirus cases last week hit a weekly record. More than 5.2 million infections were registered in the last seven days, more than any other week since the pandemic began over a year ago. The virus outbreaks are accelerating in many countries that are ill-equipped to deal with the spread of the disease.
Futures contracts tied to the Dow Jones Industrial Average and the S&P500 are slightly negative on the day. Nasdaq futures remain flat before the opening of the US session on Monday.
New Highs for Equity Markets
Over the last few weeks, equity markets have reached new highs, which suggests investors have largely shrugged of coronavirus fears. Boosting hopes for a rosier future, economic data from the US points to an accelerated pace of economic recovery. The backdrop of the US offering massive fiscal and monetary policy also adds to high expectations for a quick rebound as the economy gradually opens up.
While the US and the UK are going through strong vaccine rollout campaigns, many other parts of the world have not witnessed vaccination progress of that scale or even close. In India, for example, roughly 10% of the population has been vaccinated, compared to over 60% in the US and the UK. The significant gap could mean that opening up the global economy, as opposed to local economies, poses a major challenge and could have a long way to go. Other fears that threaten the global economic rebound include a potential mutation of the virus that current vaccines, as of yet, may not be able to cope with.
Meanwhile, the cryptocurrency market has experienced a setback over the weekend. The rapidly growing crypto market plummeted nearly 10% during the weekend on rumors that the US government has cracked down on crypto money laundering. In addition, reports mentioned a blackout in China’s Xinjiang region, an area heavily used for bitcoin mining.
The overnight crash knocked more than $12,000, or 20%, from bitcoin’s price. On Sunday morning, bitcoin recorded its biggest one-day drop for almost two months. The world’s largest asset reached as low as $53,000, its lowest since the last week of March. The drop came less than a week after bitcoin climbed to its all-time high near $65,000. On Monday, bitcoin has recovered slightly and is trading around $57,000.
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