Pfizer and partners will begin distributing their Covid-19 vaccine in the US this week. The company believes that 80% of US citizens could be vaccinated by the middle of 2021, delivering herd immunity. Despite the positive news shares, crude oil and base metals fell in Friday night trading after a six week vaccine optimism rally.
Markets talk this morning is focussed on the extension of talks between Britain and the European Union. The British pound is trading higher, suggesting optimism around the commitment of both parties to find a post Brexit trade agreement.
The positive developments in Europe may help offset the weak leads from last weeks’ closing action. Asia Pacific traders may offer an early answer to an important market question. Having “bought the rumour” of an effective vaccine, now that delivery is here will investors “sell the fact”?
Japan releases Tankan data today. These activity reads for the fourth quarter are forecast to show contraction across large and small manufacturing enterprises. China industrial production and retail sales are due tomorrow, ahead of a two day meeting for the US Federal Reserve Open Market Committee.
The Fed is expected to keep rates on hold, but traders are watching closely for any extension of the asset purchase program that could flatten the US bond curve.