NEW YORK: Global stock benchmarks and oil prices fell sharply on Tuesday after drugmaker Moderna warned that current vaccines are unlikely to be effective against the new coronavirus variant, prompting investors to splurge in safe-haven assets like government bonds and the yen. Inspire to pile up.
“There is no world, I think, where[the effectiveness]is the same level,” Moderna’s chief executive, Stefan Bansel, told the Financial Times in an interview, comparing the effectiveness against the new Omicron variant to the previous variant. .
“I think it will be a physical drop. I just don’t know how much because we need to wait for the data. But the scientists I’ve talked to … are like, ‘It’s not going to be good,'” Bansal said.
Bansel previously said on CNBC that there should be more clarity in about two weeks on the efficacy of COVID-19 vaccines against the Omicron variants, but is not ready to start shipping a freshly designed vaccine designed for it. It may take months.
“It’s not good news, and it’s coming from someone who should know,” said Joe Caperso, currency strategist at the Commonwealth Bank of Australia. “Markets have reacted exactly the way you’d expect them to.”
Federal Reserve Chairman Jerome Powell told Congress that high inflation would remain in place until the middle of next year after the deficit accelerated, leaving the central bank “likely” the asset-set introduced last year to support the economy. Will discuss expediting the tapering of the procurement programme. Epidemic.
“We’ve said for a long time that the Fed is the ultimate master of ‘transient’ characterization and the chairman’s decision to move beyond that is a decidedly swift move,” said Ian Lingen, head of US rate strategy at BMO Capital Markets.
Globally, the gauge of MSCI’s shares fell 1.39%, following broader declines in Europe and Asia. Worries that the new version would lead to more travel restrictions continued to impact European travel and leisure stocks, which posted their biggest monthly decline since the initial COVID-19 lockdown in March 2020.
In the United States, the Dow Jones Industrial Average fell 652.22 points, or 1.86%, to 34,483.72, the S&P 500 fell 88.26 points, or 1.90%, to 4,567.01, and the Nasdaq Composite fell 245.14 points, or 1.55%, to 15,537.69. [.N]
Benchmark 10-year notes rose 26/32 in price to 1.4426% from 1.529% late Monday.
The Omicron concerns sent returns on 10-year German bonds – considered one of the world’s safest assets – to their lowest level in just over a week at -0.345%.
The Japanese yen – traditionally seen as a safe harbor due to its role as a funding currency – was near its highest level of the month.
US crude was down 4.52% at $66.79 a barrel and Brent at $70.57, down 3.91% on the day. [O/R]
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