The US pharmaceutical company Pfizer announced positive results from its vaccine trial on Monday against the coronavirus, sending risk assets higher. The most notable move was in the US junk bond market, where the yield fell more than 40 basis points to hit a new all-time low of 4.56%.
Without a doubt, a vaccine will change the rules of the game for the world economy. Therefore, the risk reaction of the markets to Pfizer’s announcement is not surprising. Having said that, it may be too early to improve global growth forecastsaccording to some economists.
“Let’s not forget that we still have 10 million jobs lagging behind, we still have a lot to do, “said Torsten Slok, chief economist at private equity firm Apollo Global Management Inc., according to Bloomberg.
Meanwhile, James Sweeney, chief economist at Credit Suisse Group AG, wants to see the vaccine up and running before making substantial changes to his forecasts.
On the other hand, several European nations have re-imposed economically painful blockade restrictions to contain the second wave. Additionally, many US states may soon have to return to lockdown. All of this could derail the economic recovery in the short term.
Credits: Forex Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.