Daily Commentary BY THE CURVE TEAM –

Vaccine Hopes Lift Markets

19th of May, 2020

Headlines around the globe overnight were littered with optimism about a potential Covid-19 Vaccine, sending markets on a tear. Whilst the hope for all is that this potentially positive development eventuates into a fully fledged vaccine, many in the medical community called for calm.

The vaccine having completed a stage 1 trial with just 45 participants was deemed by the manufacturer Moderna to have a “high probability to provide protection from COVID-19 disease in humans”. Moderna will now enter in the phase 2 and 3 trails of the mRNA-1273 vaccine with all hoping it to be successful. To state the obvious, we are very early into the development phase of this and other vaccines. The sample sizes are extremely small and it is simply too early to know the efficacy of the drug.

Withstanding those caveats, in order for life to return fully to pre-covid conditions a vaccine is required. There are many that  still speculate in order for full overseas travel and those large gathering events such as major sporting events and concerts to go ahead the precondition by governments will be some form of vaccine.

On the back of the release, markets rallied.  US stocks went up across the board with the Dow up almost 4% and US 1oyr Treasuries yields were up over 8bps.

Locally today, we will hear from the RBA with the release of Minutes from their May Board Meeting. We will also see survey data from the ABS at 11:30 with the release of the “Household Impacts of COVID-19 Survey”.

Matthew Dunshea

Client Relationship Manager