Asian and European countries rushed to tighten restrictions on Friday after a new and possibly vaccine-resistant variant of the coronavirus was discovered in South Africa, with Singapore and India announcing stricter border controls and stricter testing.
Susanna Street, Investment and Markets Analyst, Hargreaves LANSDOWN:
“Fear gripped financial markets as the travel industry entered another violent storm, after the discovery of a new strain of COVID that could be more contagious and could make vaccines less effective.”
Peter Chatwell, Head of Multiple Asset Strategy at MIZUHO INTERNATIONAL:
European shutdowns on their own could have meant weak GDP growth in the fourth quarter, but in turn a rebound in the first quarter. The United States, the United Kingdom, and Asia were not affected by the problem of Europe. If the new variable presents its potential (rape delta, reduce vaccine efficacy), we need to consider Q4 and Q1 GDP growth globally. The effectiveness of the vaccine will determine the severity of the lockdown, and thus whether this becomes another stagnation.
RBC Capital Markets, Europe:
It is the threat of a vaccine flight that is causing the market reaction in both stocks (bottom) and bonds (top). As long as markets face a familiar virus situation that can be overcome with an adequately designed and implemented vaccination strategy, reactions will be muted, as we saw with the short-term bond market rally last week when fresh closings were announced in Europe. However, this new alternative creates a potential threat to known responses and thus creates a more sustainable market response.
Holger Schmieding, chief economist at Berenberg:
At this point, it is too early to assess the potential economic consequences. Any new wave could cause serious economic damage. As one potential mitigating factor, the world is now on high alert and has enhanced its ability to develop, modify and produce vaccines.
Takashi Hiroki, Chief Strategist, Monks, Tokyo
“This alternative is a new risk to the markets. We can’t say to what extent you can evade vaccines.”
Ray Atrell, Head of Forex Strategy, NAB, Sydney
“People react with uncertainty about what this means. You shoot first and ask questions later when this kind of news breaks.”
Ministry of Health Seong Sim, Currency Analyst, Bank of Singapore
“We still don’t know how contagious the virus is… It’s a general uncertainty. Markets here anticipate the risks of another global wave of infection if vaccines are ineffective.
“Reopening hopes could be dashed.”
Mark Arnold, CIO, Virtual Asset Management, Brisbane
“I don’t think there is any going back to the pre-COVID world. We’re just going to get the mutations through time and that’s going to change the way people work in the economy. That’s just a reality.”
Shinichiro Kadota, Senior Forex Strategist, Barclays, Tokyo
“We see Germany considering a shutdown, so this new alternative and the explosion in the case of COVID poses some risks to the overall market sentiment.
“If the coronavirus situation worsens, the dollar may fall further against the yen, but otherwise the divergence of monetary policy will certainly affect the yen in the medium term.”
Martin Whitton, Head of Fixed Income, CBA, Sydney
“Watch out for the new COVID-19 variant. None of us are a virus specialist, but we have all seen the impact on the intended course of central bank policy and markets.”
Jeffrey Haley, Analyst, Oanda, Jakarta
“The UK has temporarily halted flights from South Africa and five other neighboring countries, and we can expect more of this elsewhere. The complacency with the emergence of the delta variant in India has been a hard-learned lesson.
“The only bull in China that could truly derail the global recovery has always been a new strain of COVID-19 that has swept the world and caused mass social regressions to be re-imposed. All we know so far is B.1.1 .529 mutated in a massive way, but the markets are not take a risk.”
This story was published from the news agency feed without modifications to the text.
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