Optimism surrounding the vaccine news has abated while fears of shutdowns persist
Wall Street indexes closed lower on Wednesday, having erased earlier gains as encouraging vaccine developments were outweighed by surging COVID-19 infections and lockdowns. Pfizer Inc and its German partner BioNTech revealed a 95% success rate at the conclusion of their COVID-19 vaccine trial but equities saw only a short-lived spike in reaction to the news as new lockdowns in the United States triggered fresh concerns over the health of the country’s economy. The S&P 500 and the Dow Jones Industrial Average were 1.5% lower each while the Nasdaq Composite shed 0.82%.
Asian equities were mixed on Thursday as investors weighed up rising coronavirus cases with lingering vaccine hopes after drug companies Moderna and Pfizer both said their vaccines are more than 95% effective. Concerns over the impact of the recent spike in COVID-19 cases prevented stocks from rising. As such, Japan’s Nikkei 225 dipped 0.36%, the Hang Seng in Hong Kong fell 0.7%, while the Shanghai Composite Index gained nearly 0.5%. In Australia, the S&P/ASX 200 was up nearly 0.25% after the official report showed that the country’s economy added 178,800 jobs last month, well above forecasts of around 30,000.
European stock markets opened lower on Thursday as optimism surrounding the vaccine news has abated while fears of shutdowns due to rising coronavirus cases persist. The European Central Bank President Christine Lagarde said in a speech today that a surge in virus cases was adding to the already heightened level of uncertainty in the region. The pan-European Stoxx 600 fell 0.7% in early trade.
Elsewhere, the greenback has shifted into a recovery mode for the first time since the start of the week as safe-haven demand picked up. As a result, the EURUSD pair extended losses to the 1.1830 area after a rejection from the levels just below the 1.1900 barrier. Despite the correction, downside risks surrounding the common currency look limited at this stage. Later today, the US jobless claims data could affect short-term dynamics in USD-pairs.