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Global stocks soar on Pfizer, BioNTech COVID-19 vaccine news

Global stocks surged to record highs after Pfizer on Monday said its experimental vaccine was more than 90% effective in preventing COVID-19, based on initial data from a large study.
Markets rallied as the data was seen a major victory in the fight against a pandemic that has killed over one million people and roiled the world economy. The MSCI world equity index, which tracks shares in 49 countries, and futures tracking the S&P 500 hit all-time highs.

STORY:
Pfizer, BioNTech say their COVID-19 vaccine is more than 90% effective:

MARKET REACTION:
European stocks jump 4% to March highs, safe-haven Japanese yen slips 0.5% and spot gold slides 1.2%.

COMMENTS:
CARSTEN BRZESKI, GLOBAL HEAD OF MACRO AT ING:
“The bigger driver of the economic outlook is from outside factors. Right now that means the development of a vaccine, which is why we are following news on this front closely.

“The base case we have already is that we are likely to get a vaccine by year-end and that it will be rolled. So we do see news like this as positive. The worrying sign would be if we get negative news say on testing, that would hurt how we view the economic outlook.”

RUSSELL SILBERTSON, CO-HEAD OF DEVELOPED MARKET FX & RATES AT ASSET MANAGER NINETY ONE

“If the bearish view embedded in markets was that there was no effective vaccine any time soon priced in, clearly that needs significant repricing now.

“You couple (this morning’s news) that with the sheer weight of all the stimulus in markets, and that’s a very strong economic upside scenario.”

CHRIS SCICLUNA, HEAD OF ECONOMIC RESEARCH, DAIWA CAPITAL MARKETS, LONDON

“The good news on the vaccine was always the upside risk for markets and if it is developed and rolled out quickly, then that does support the recovery and reflation narrative.

“But we have do have to be careful that the number of patients reporting results are still very low. So we need to be perhaps cautiously optimistic about this news and look at a lot more results. The results have not been peer reviewed yet but it is positive. They (Pfizer) are also upping their production forecasts and that is positive.”

NEIL WILSON, CHIEF MARKET ANALYST AT MARKETS.COM
“Whilst we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for. Public health officials will remind us there is a long road ahead, and many challenges will be faced along the way, but there is an enormous sense of optimism today – light at the end of the tunnel.

“Let’s just hope the vaccine deniers won’t get in the way, but 2021 just got a lot brighter.”

NIKESH PATEL, HEAD OF INVESTMENT STRATEGY, KEMPEN CAPITAL MANAGEMENT, LONDON

“This is the first news that allows governments to start planning ahead to when economies can properly start to reopen from lockdowns. That gives them more visibility and concreteness about what fiscal policy they can take.

“Monetary policy can only go so far at this point and it needs to be a fiscal response for a real recovery and this kind of news is great as it allows governments to make that fiscal response without fear of endless support.”

KENNETH BROUX, FX STRATEGIST AT SOCIETE GENERALE
“The COVID 19 vaccine news adds to the positive risk tone in stocks and underpins high beta currencies vs the U.S. dollar. Any positive news on vaccine is good news for the world economy and offers perspective for rebound/normalisation in 2021 growth.”

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