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Nervous investors drive underperformance

Nervous investors drive underperformance

Market sentiment split in overnight trading. Currency, bond and commodity markets appeared to respond to further good news on vaccines, while share investors seemed to focus on the potential economic costs of rising infection rates. However crypto markets are dominating trader conversations as Bitcoin makes an approach to its all-time high.

Pfizer’s upward revision of its estimate of the effectiveness of its vaccine saw the US dollar index touch two year lows. The confidence also lifted commodity currencies, reflecting gains in industrial metals and crude oil prices. Energy prices were boosted by a surprising draw on distillates in weekly US inventory numbers.

Bonds sold off and gold prices remained at lower levels, despite the weaker US dollar. The stronger performance of Bitcoin as it trades above US $18,000 suggests that at least some investors see a haven in the alternate investment. Other cryptocurrencies are displaying positive momentum, and there is potential for more established coins to catch up with Bitcoin’s lead.

Asia Pacific share market futures are slightly lower after a late sell off on Wall Street. Tech shares outperformed, reflecting the defensive nature of equity trading. Australian jobs data is due this morning. Analysts expect a loss of 30,000 jobs and an increase in the unemployment rate to 7.2%, from 6.9% previously.

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