Optimism evaporated in overnight trading. The wild sentiment swing appeared to hinge on reports from medical research experts that drilled into Monday’s report from drug maker Moderna. The experts’ view that the information released was insufficient to make any judgements deflated market enthusiasm. Shares swung from gains to losses, and bonds and gold rallied.
Non-experts jumped on the fact that the government agency working with the company did not make an announcement of its own. The National Institute for Allergy and Infectious Diseases is usually quick to inform the public of good news, and the fact it passed on this opportunity raised questions.
Shares in Moderna dropped from an all-time high as doubts rose, and crude oil and base metals edged lower as markets pulled back from peak optimism. The overnight action illustrates a market focus on news of the pandemic, as devastating macro-data and weaker company reports have little impact on overall sentiment.
Currency markets once again went their own way. The US dollar moved lower, and the Australian dollar led major currencies as it attained ground over 65 US cents.
Futures markets indicate the sentiment swing will weigh on Asia Pacific trading today, although the overnight falls still leaves most regional markets with a modest two-day gain. The People’s Bank of China is expected to hold one and five year prime rates steady today, but a surprise reduction could support both risk and haven assets.