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SYDNEY (Reuters) – U.S. stock futures led a market rebound on Monday as investors prepared to wait a few weeks to see if the Omicron coronavirus variant would really derail economic recoveries and the tightening plans of some central banks.
Oil prices bounced more than $3 a barrel to recoup a chunk of Friday’s shellacking, while safe haven bonds and the yen lost ground as markets latched onto hopes the new variant of concern would prove to be “mild”.
While Omicron was already as far afield as Canada and Australia, a South African doctor who had treated cases said symptoms of virus were so far mild. “Another key difference is there are far higher vaccination take up rates globally now compared with when Delta emerged,” said Craig James, chief economist at asset manager CommSec. “What the news on Omicron does highlight is the need for central banks and governments to take a cautious approach to removal of economic support and stimulus.” Trading was erratic on Monday but there were signs of resilience as S&P 500 futures added 1.0% and Nasdaq futures 1.2%. Both indices suffered their sharpest fall in months on Friday with travel and airline stocks hit hard. European Central Bank President Christine Lagarde put a brave face on the latest virus scare, saying the euro zone was better equipped to face the economic impact of a new wave of COVID-19 infections or the Omicron variant. In commodity markets, oil prices bounced after suffering their largest one-day drop since April 2020 on Friday. “The move all but guarantees the OPEC+ alliance will suspend its scheduled increase for January at its meeting on 2 December,” wrote analyst at ANZ in a note. “Such headwinds are the reason it’s been only gradually raising output in recent months, despite demand rebounding strongly.” Brent rebounded 4.2% to $75.80 a barrel, while U.S. crude rose 5.1% to $71.61