Global equity markets continued to book huge gains, as the US earnings season begins, spurred by news of progress on vaccines. A German Company BioNTech and Pfizer have both made rapid advances on vaccines and the US FDA have approved a ‘fast track’ trial. This was in spite of record viral infections across the globe, according to the WHO, with record levels in the US and a ‘second wave’ in Melbourne causing re-enactment of lockdowns.
The vaccine news sparked a big rally in equities and allowed the US Dollar to retreat, with the EUR rising to 1.1360, while the Yen traded 107.20. The GBP bucked the trend, slipping below 1.2600, after big gains over the last week. The flagging reserve enabled the AUD to trade up towards 0.7000, but is retreating back before the local market opens, while the NZD trades around 0.6550.
Earnings season is underway in the US and much of the gains in equities, may fail to live up to the corresponding share prices. The rising infection rates may yet have a negative impact global economies re-opening strategies, as has been seen in Melbourne, with the Government imposing a lockdown for Melbourne, for the second time. This is destructive for the local economy in the second biggest city in Australia.
The coronavirus remains the centre of market attention, while the Chinese Geo-Political situation could become the biggest threat to global trade.