Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Anxiety over the Omicron variant is rippling through the financial markets again this morning, after the chief executive of drugmaker Moderna warned that existing Covid-19 vaccines are unlikely to be as effective against the Omicron variant as they have been against Delta.
Stéphane Bancel’s comments, to the Financial Times, have hit Asia-Pacific stocks, and the oil price, just a day after markets had stabilised after Friday’s tumble.
The FT says:
The chief executive of Moderna has predicted that existing vaccines will be much less effective at tackling Omicron than earlier strains of Covid-19 and warned it would take months before pharmaceutical companies can manufacture new variant-specific jabs at scale.
Stéphane Bancel said the high number of Omicron mutations on the spike protein, which the virus uses to infect human cells, and the rapid spread of the variant in South Africa, suggested the current crop of vaccines may need to be modified next year.
“There is no world, I think, where [the effectiveness] is the same level . . . we had with Delta,†Bancel told the Financial Times in an interview at the company’s headquarters in Cambridge, Massachusetts.
He added: “I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to . . . are like ‘this is not going to be good’.â€
The Moderna chief executive’s comments come as other public health experts and politicians have tried to strike a more upbeat tone about the ability of existing vaccines to confer protection against Omicron.
The news has knocked risk-sensitive currencies, with the Australian dollar dropping to a one-year low.
Sean Callow
(@seandcallow)Moderna CEO Predicts Vaccines to Struggle With Omicron: FT (BBG)
…A$ making marginal new lows since November 2020 #ausbiz pic.twitter.com/g030HtFp77
Japan’s Nikkei stock market index sank by 1.6%, as Bancel’s comments worried investors.
Gearoid Reidy
(@GearoidReidy)Japan’s stocks reverse earlier gains and end up with the Nikkei down 1.6% after the Moderna CEO says in an FT interview that there is “no world” in which the effectiveness of vaccine is the same with omicron as it was with delta. pic.twitter.com/eSwRjfrp5y
European markets are heading for a lower open, with the FTSE 100 seen falling around 1%.
IGSquawk
(@IGSquawk)European Opening Calls:#FTSE 6987 -1.73%#DAX 14962 -2.09%#CAC 6610 -2.46%#AEX 770 -2.15%#MIB 25451 -2.27%#IBEX 8248 -2.45%#OMX 2229 -1.92%#SMI 12074 -1.20%#STOXX 4010 -2.43%#IGOpeningCall
Yesterday, the World Health Organization said Omicron poses a “very high†global risk, and is likely to spread internationally.
Overnight, Hong Kong has widened a ban on entry for non-residents from several countries. Non-residents from Angola, Ethiopia, Nigeria and Zambia would not be allowed to enter as of November 30.
Non-residents who have been to Austria, Australia, Belgium, Canada, the Czech Republic, Denmark, Germany, Israel and Italy in the past 21 days would not be allowed to enter the city from December 2nd.
England’s mask mandate returns today, meaning people will be required by law to wear a face covering in certain places.
America’s top central banker, Jerome Powell, will testify to the Senate later today, where he’ll explain how the Omicron variant poses a downside risk to the US economy, and complicates the inflation picture.
The agenda
- 8.55am GMT: German unemployment report for November
- 10am GMT: Flash estimate of Eurozone inflation in November
- Noon GMT: India’s third-quarter GDP report
- 1.30pm GMT: Canada’s third-quarter GDP report
- 3pm GMT: US house price index for September
- 3pm GMT: US Federal Reserve chair Jerome Powell testifies to the Senate Banking committee
