COVID cases are exploding higher as Omicron spreads across the US and the rest of the world.
And while early data shows that Omicron seem to cause less severe infection (meaning less hositalizations), we still need to anticipate substantially higher case counts once the holiday week is over.
The number of cases cases could be double or triple the previous all-time highs during the first two weeks of January.
This could cause some USD volatility in early 2022.
As a benchmark, let’s look at South Africa and the UK.
In South Africa, which fortunately is now on a steep decline from Omicron, cases rose to a high of just over 37,000 per day, which was ~42% higher than the previous high in cases pre-Omicron.
If we use this 42% increase as a “base case", this would mean that a 42% increase over
the previous daily record of U.S. cases (306,000 on Jan. 8, 2021) would equate to 452,000 daily new cases!
Given that the U.S. has a much larger and mobile population (meaning more spread and transmission) and has much more robust testing capability (ability to capture many more positives)., this would be the lower end of estimated new cases.
Let’s now look at the UK data, as Omicron started to rise there about one to two weeks before
the U.S., which acts a bit of a leading indicator.
On Dec. 28, the UK recorded 168,306 new COVID cases. That’s a 148% increase over the 67,794 previous record in January 2021.
Using that as a guide for the U.S., if we see COVID cases increase 148% from the previous peak (306,000), we will see a whopping 758,000 cases per day, likely in the next few weeks!
I wouldn’t be suprised to see a day that reports 1 million cases.
Will such big numbers cause fear in the markets causing USD, JPY or CHF to rise due to their safe-haven status?
In any case, do not be shocked if we see more than 700,000 new COVID cases daily in the U.S. in the coming weeks.
