D-PIMS Weekly Market Update - Week of 13th to 19th December 2021
Today’s Monday Update:
Over the course of the last week, market moving headlines were mostly economic, and Covid-19 related:
• On Monday, researchers from the University of Oxford published results from a study, where they analysed blood samples from participants who were given doses from AstraZeneca-Oxford or Pfizer-BioNTech, in a large study looking into mixing of vaccines.
The Oxford study said that there was no evidence yet that the lower level of infection-fighting antibodies against Omicron could lead to higher risk of severe disease, hospitalisation or death in those who have got two doses of approved vaccines. Although it did indicate that increased infections in those previously infected or vaccinated may be likely.
Long queues of people formed at vaccine centres in major English cities on Monday, after Prime Minister Boris Johnson urged all adults to get a booster shot, Reuters reporters said. Queues formed at centres in London and Manchester in northern England. There were also issues booking appointments online.
• Two doses of Pfizer-BioNTech's COVID-19 vaccine appear to have given 70% protection against hospitalisation in South Africa in recent weeks, a major real-world study on the potential impact of Omicron showed on Tuesday, as the country battles a spike in infections linked to the new variant. Glenda Gray, South Africa's Medical Research Council (SAMRC) president, said it was important that the Pfizer-BioNTech vaccine appeared to be offering good protection against severe disease and hospitalisation.
Britain will remove all 11 countries from its COVID-19 travel red list from Wednesday because there is now community transmission of Omicron, Health Secretary Sajid Javid told parliament.
The British government's scientific vaccine advisory group is discussing whether or not to advise children as young as five receive COVID vaccines, the chair of Britain's vaccine group said on Tuesday.
British employers hired a record number of staff in November, adding to signs that the labour market withstood the end of the government's furlough scheme and underscoring the Bank of England's dilemma as it meets on interest rates this week. Tax office data showed 257,000 people joined company payrolls last month, the most since records began in 2014.
A trial has begun of a new needle-free Covid-19 vaccine to protect against future variants of the virus. The vaccine, administered through a jet of air, has been developed by Prof Jonathan Heeney of Cambridge University and chief executive of DIOSynVax. Participants, aged between 18 and 50 years old, will take part at the NIHR Southampton Clinical Research Facility. Prof Heeney said: "As new variants emerge and immunity begins to wane we need newer technologies."
• On Wednesday, British consumer price inflation surged to its highest in more than 10 years in November, jumping to 5.1% from October's 4.2%, in news likely to unsettle the Bank of England as it considers whether to raise interest rates on Thursday. Price pressure from a broad range of goods and services - but especially petrol, clothing and footwear - were responsible for the rise, the Office for National Statistics said.
The Federal Reserve Bank in the U.S., said on Wednesday it would end its pandemic-era bond purchases (QE) in March 2022 and pave the way for three quarter-percentage-point interest rate hikes by the end of 2022, as the U.S. economy nears full employment and the central bank copes with a surge of inflation.
• On Thursday, the Bank of England became the world's first major central bank to raise borrowing costs since the Coronavirus pandemic hammered the global economy last year, as it said inflation was set to hit 6% in April, three times its target level.
The nine-member MPC voted by 8-1 to raise Bank Rate to 0.25% from 0.1%. Most economists polled by Reuters had expected the BoE's Monetary Policy Committee to keep Bank Rate at 0.1% due to a new surge in Coronavirus cases.
• On Friday, Britain and Australia signed a free trade deal projected to eventually boost bilateral trade by over £10 billion, eliminating tariffs, opening up sectors like agriculture and allowing freer movement for service-sector professionals. The elimination of tariffs on Australian wine, and a tariff-free quota for beef will help exporters hit by sanctions in China to pivot to British sales. British cars, whiskey, confectionary and cosmetics will see tariffs phased out in Australia. "This is the most comprehensive and ambitious free trade agreement that Australia has concluded, other than with New Zealand," Australia's Prime Minister Scott Morrison and Trade Minister Dan Tehan said in a joint statement.
• Over the week, the main Global Stockmarkets were down, apart from the Nikkei in Japan, which was only very slightly up. Markets were concerned over rising inflation and the spread of Omicron. Over the week, all the D-PIMS Portfolios down, particularly the higher risk portfolios. The Portfolios were helped by their diverse allocations.
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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.