Financial markets were in a risk-on mood yesterday, boosted by positive prospects for a vaccine as well as hopes for new stimulus from both sides of the pond. The greenback weakened while stock markets rose in what was an encouraging start to the week for investors.
Yesterday’s news concerning the AstraZeneca/Oxford University vaccine was well received after all 1,000 patients produced antibodies and killer T-cells which lasted at least 2 months with no serious side effects. This ramps up expectations that a vaccine will indeed be produced by the turn of the year which bolstered risk sentiment across Monday’s session.
The EU edged closer towards a recovery deal yesterday. The leaders continued talks throughout the day which has ultimately led to agreement overnight. The deal comprises of €750 billion which will be split across the hardest-hit economies and then provided as grants and low-interest loans. This development has helped maintain risk flows heading into Tuesday’s European session.
Lastly, news regarding another round of US stimulus surfaced across markets yesterday. It’s early days yet but the simple development of the Republicans and Democrats agreeing to sit down together and discuss the merits of more stimulus has been taken as a deeply encouraging sign.
Written by Viv Savani. 9:41am, July 21st 2020
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