Archives of “November 30, 2021” day

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Moderna CEO: There will be a material drop in vaccine effectiveness against omicron

  
  Analysis

Moderna CEO, Stéphane Bancel, remarks in an interview with the FT

Moderna CEO, Stéphane Bancel, remarks in an interview with the FT
  • There is no world where the effectiveness is the same level
  • I think it is going to be a material drop, not sure by how much
  • All the scientists I talked to said that “this is not going to be good”
  • Full interview (may be gated)
This seems to be what is triggering the drop in risk trades as I am struggling to see any other notable headlines around this time.
If “no news is good news” helped to keep markets calm yesterday, this headline in particular is not exactly encouraging for what we will expect to see in the weeks to follow.
Risk trades are starting to see a steeper fall now across the board with the yen, franc, and dollar being the beneficiaries at the moment in the FX space.

10-year Treasury yields fall below Friday lows as fresh risk-off wave hits

  
  Analysis

US 10-year yields down 6 bps to below 1.47%

USGG10YR
That is the lowest in almost three weeks as the market is hit with a fresh risk-off wave after less optimistic vaccine comments by Moderna CEO here.
We’re all trading on virus news now and the latest twist hints at a suggestion of what we could see from the supposed vaccine data in a few weeks’ time.
As mentioned earlier, there isn’t much hurry to buy the dip in risk trades at the moment – especially not when there are many more weeks of these kinds of headlines to navigate through, so expect sentiment to hang on a thread in the meantime.
With bond yields being hit, USD/JPY also came close to testing 113.00 again and is knocking on the door of short-term support close to the level:

 

USD/JPY H1 30-11

US Federal Reserve December FOMC meeting preview: ‘significant change’ expected

  
  Analysis

he upcoming Federal Open Market Committee meeting is December 14-15.

Westpac snippet preview:
  • Given recent FOMC commentary, the December 14-15 meeting is expected to see significant change in the Committee’s approach to policy. 
  • At that meeting, Westpac now expects the taper to be accelerated to conclude in March 2022, making room for three 25bp rate hikes at the June, September and December 2022 meetings.
—
The December meeting looks set to provide a bit more clarity on the Fed’s path ahead. As for tomorrow, Tuesday US time, Fed Chair Powell appears before the US Congress’ Senate Banking Committee hybrid hearing on “CARES Act Oversight of Treasury and the Federal Reserve: Building a Resilient Economy.”
Fed Chair Powell

Yen crosses higher

  
Analysis, Forex

The USD has been offered since prior to the US (equity) cash market close and that is continuing.

USD/JPY has found a bid alongside which is net therefore pushing yen crosses higher.
AUD, EUR, GBP, NZD, CAD all performing .
Fresh news flow is … nothing (apart from what has been posted already)
Omicron fears began to dissipate in Asia trade Monday and that seems to be the case again Tuesday so far.

Fed Chair Powell says factors pushing inflation higher will linger into 2022

  
  Analysis

Federal Reserve System Chair Powell – these from his prepared testimony (via Reuters)

 

  •  factors pushing inflation upward will linger well into next year
  • inflation running well above 2% goal, pushed up by pandemic-related supply and demand imbalances
  • continue to expect inflation will move down significantly over the next year
  • we will use our tools to support economy and strong labor market, and to prevent higher inflation from becoming entrenched
  • economy continues to strengthen
  • conditions in labor market have continued to improved
  • still ground to cover to reach maximum employment, expect progress to continue
  • slack is diminishing in the labor market
  • rise in covid cases, omicron variant pose downside risks to employment, increased uncertainty for inflation

 

Powell sticking to the transitory inflation line, but it’ll be into next year before it comes down.

Defcon alert raised to Level 4

  
  Analysis

A couple of geopolitical events contributing:

  • The current defcon level overall is now at defcon 4 today as there is a raised CENTCOM due to a US drone strike on a vehicle near Binnish and a raised EUCOM level due to the United States activating an artillery command in Europe as Russia amasses troops and artillery near the Ukrainian border.
Link for more (this the ‘Private U.S. Intelligence Gathering Informative Organization’)
Stay tuned to see if the officials follow suit.
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