(Reuters). – Dhara Ranasinghe gives a glimpse of the future.

Investors had been putting COVID-19 at the bottom of their concerns list in recent months. However, it has returned to number one as new South African variants spread.

Asia stock prices outside Japan fell more than 2%. U.S. and Europe stock futures have fallen sharply. Oil prices dropped almost 3.5%. The safe-haven Japanese yen has risen around three quarters of a tenth, while U.S. Treasury yields have fallen almost 10 basis points.

Price moves will likely be exacerbated by the lack of liquidity due to Thursday’s U.S. Thanksgiving Day holiday. However, there are no doubts that Friday’s overnight headlines caught markets completely off-guard.

Although little is known about the variant that was found in South Africa and Botswana, it’s believed to have unusual mutations, which could make it more resistant to immune reactions.

This news is coming as Europe fights an resurgent COVID-19 epidemic, which has triggered new restrictions that increase uncertainty about the immediate economic outlook.

This presents a new challenge to central banks like the European Central Bank. They have just begun to recognize that inflation pushes are lasting longer than expected.

Other than the recent COVID headlines there are many reasons to be uneasy, according to some. These include the Fed rate hike expectation rise, Ukraine/Russia tensions. This has wider geopolitical implications and a slowdown of China’s property market.

Emerging markets are in the spotlight as South Africa is now surpassing the $16.00 mark against the dollar.

The following are key developments which should give more direction to the markets Friday

– ECB speakers: ECB President Christine Lagarde

Huw Pill, chief economist at the BOE speaks

Canadian Survey of Business Conditions, Q4

Japan PM Kishida encourages employers to hike wages by 3% and more

– China Evergrande soccer stadium taken over by government -source

– China asks Didi to delist from U.S. on data security fears – Bloomberg News New Covid variants rattle markets, https://fingfx.thomsonreuters.com/gfx/mkt/zgpomkobopd/MB2611.png