Post-covid era emerges, but markets already knew it

There is a Coronavirus headline doing the rounds in Asia that at first glance, the retail forex market might want to jump into pro-risk apatite currencies, such as the British pound or Aussie dollar:

‘Full blown’ pandemic phase of covid nearly over in the US, declares Fauci - FT

However, this has failed to move the needle in financial markets. The Aussie is flat, GBP/USD also but at least gold is moving in the right direction,  shedding bids back towards the New York early morning resistance. 

The markets have been trading as if it were a post-covid era ever since the Federal Reserve started to hint at the withdrawal of monetary policy support in the mid to latter part of 2021. The Delta variant did not faze the US central bank's chairman, Jerome Powell, despite the quadrupling of daily coronavirus infections in the summertime. 

Instead, both the markets and the Fed were optimistic with the ''progress on vaccinations and strong policy support'', as well as the ''indicators of economic activity and employment'' that had ''continued to strengthen," quoting what the central bank had said in its 2021 June statement.

Nevertheless, these are the type of headlines that will double down the prospects of a faster pace of tightening and potentially play out in robust yields which would be expected to underpin the greenback for the foreseeable future. 

More to come...