The vaccine express, the metaphorical train that’s going to get us to the oft-mentioned light at the end of the tunnel, accelerated sharply this week.
The UK’s version was the first to leave the station, with that nation beginning vaccinations using the Pfizer/BioNTech vaccine on Tuesday. Margaret Keenan, 90, a former jewelry shop assistant in a “Merry Christmas” T-shirt, was the first to be vaccinated, and an 81-year-old man named William Shakespeare was the second.
(In passing, I’d like to send out an emergency plea for a new metaphor for our current situation. Although very apt, “the light at the end of the tunnel” image has been so widely used that it really needs to be turned off, at least temporarily.)
Canada and Bahrain fired up the engines of their programs, as it were, approving the Pfizer/BioNTech product in the course of the week, and in the US, an advisory panel recommended emergency approval of that vaccine late in the week, although final approval from the FDA was still pending as of Friday morning
At the same time, Russia was rolling ahead on its own entirely distinct track, with authorities there injecting its own Sputnik 5 vaccine in the arms of thousands of volunteers.
As it did last week, the optimism surrounding COVID19 vaccines weighed on the US dollar on a trade-weighted basis. Trading in the greenback, however, was volatile and it managed a rebound Friday morning as investor optimism faded somewhat as negotiations among US lawmakers on a new fiscal package appeared to be stalemated.
What was negative for the US dollar, over the week as a whole, was positive for its Canadian and Australian dollars and the euro. Trading in the British pound was choppy as negotiations on a post-Brexit trade deal between the UK and the EU appeared to flounder, with British Prime Minister Boris Johnson speaking of a “strong possibility” of failure at one point in the week.
The Bank of Canada acknowledged the positive news about vaccines in its last policy statement of the year on Wednesday, but pledged to maintain extremely accommodative policy to support the economy’s fragile recovery.
The US Federal Reserve’s last policy-setting FOMC meeting of 2020 happens on begins Tuesday and ends on Wednesday next week, and the US central bank’s pronouncements will be closely perused to see how it views the crosscurrents at play in the US economy.
That’s likely be the most significant development on the macroeconomic/monetary policy front, although there are plenty of other scheduled events, including policy decisions from the Bank of England and the Bank of Japan on Thursday, consumer price data in both the UK and Canada on Wednesday, and retail sales data in the same two countries on Friday. US retail sales will be released on Wednesday, with the closely watched weekly jobless claims data coming on Thursday.
While the Fed will definitely elicit some attention, other data releases could be eclipsed, to a degree, by the continuing evolution of the vaccination programs around the world, and the savage toll the coronavirus is exacting in the US and elsewhere.
According to data from Johns Hopkins University, there were 69,833,475 identified cases of COVID-19 and 1,585,727 deaths around the world as of Friday, and 15,632,336 cases and 292,382 deaths in the US.
Suggested Reading | Cambridge Market Analysis
■ Consumers’ Economic Expectations Rise in the US read article
■ US Inflation, Labor Market Klaxons Sound Warning Signals read article
■ BOC Shows Optimism on Vaccines, But Reaffirms Stimulative Policy Stance read article
Suggested Reading | Counterparties
■ LA Times: Infected after 5 minutes, from 20 feet away: South Korea study shows coronavirus’ spread indoors read article
■ Bank of Canada: Our quantitative easing operations: looking under the hood read article
■ NYT: Bergamo’s Pandemic Survivors Carry Scars Unseen and Incalculable read article
■ BIS: The financial vulnerabilities driving firms to the exit read article
■ NYT: Shift to a Not-So-Frozen North Is Well Underway, Scientists Warn read article
■ Project Syndicate: What Yellen Must Do read article
■ New Yorker: A Dad-Rocker in the State Department read article
■ IMF: Cyber Risk is the New Threat to Financial Stability read article
■ WSJ: Long a Holdout From Covid-19 Restrictions, Sweden Ends Its Pandemic Experiment read article
■ Bloomberg Opinion : Investors Risk Being Shipwrecked on Shiller’s Cape read article
Calendar for the Week Ahead
Monday, December 14
■ EUR – Industrial Production
■ AUD – Reserve Bank of Australia Meeting Minutes
Tuesday, December 15
■ GBP – Employment Data
■ USD – Industrial Production
Wednesday, December 16
■ GBP– Consumer Price Index
■ CAD – Consumer Price Index
■ USD – Retail Sales
■ USD – Federal Reserve Interest Rate Decision
■ AUD – Gross Domestic Product
■ AUD – Employment Data
Thursday, December 17
■ EUR – Consumer Price Index
■ USD – Jobless Claims
■ GBP – Bank of England Interest Rate Decision
■ JPY – Consumer Price Index
■ JPY – Bank of Japan Interest Rate Decision
Friday, December 18
■ GBP – Retail Sales
■ CAD – Retail Sales
Market Strategist and Content Editor
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