What we know

The Omicron variant has 30 changes to it including a small insertion in the spike protein and three small deletions. Around 50% of these changes are in the receptor binding domain – this is the part of the spike protein use to bind to human ACE-2, which is the enzyme the coronavirus targets to enter cells and infect a person. If there are mutations here this makes the spike protein less recognisable to the antibodies made in response to either a vaccination or natural antibodies.

The bottom line is that the Omicron is different.

It is a worry

The concern is that these changes above mean that the virus transmits more quickly. Early PCR tests showed that 90% of 1,100 new cases reported November 24 in a SA province were caused by the new variant. SA President Cyril Ramaphosa said that the average daily cases rose from 500 case in the previous week to 1,600.

It is also uncertain how bad it is (more…)

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

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

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

• 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.

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

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.