Risk-Off Carries Over Into Asia

A risk-off feel has carried over into the Asia-Pacific session, with the latest Covid-19 vaccine news adding fuel to existing angst. STAT ran an exclusive piece picked up by major news wires, noting that AstraZeneca halted a phase 3 vaccine trial after one of the participants was diagnosed with an unexplained illness. A potential vaccine developed jointly by AstraZeneca and the University of Oxford had been considered one of the most promising globally. The company called putting trials to a halt a routine safety procedure, with a STAT source noting that the patient is expected to recover.

• The news come against the generally defensive backdrop of Brexit worries and flaring Sino-U.S. tensions. With a no-deal Brexit becoming an ever-more probable perspective, a UK minister told lawmakers on Tuesday that the nation may break the international law in a limited way if it rips up parts of the current withdrawal agreement with Brussels, as reported over the weekend.
• Elsewhere, the U.S. sanctioned three Xinjiang companies over human rights concerns and considers adding six more firms to the list, targeting cotton, textiles and tomatoes from the province. Now we await China's response. Global Times Edito-in-Chief Hu Xijin tweeted that Beijing could sanction senior U.S. officials who visit Taiwan and all U.S. companies which have ties with them, denying them access to mainland China/mainland Chinese markets.
• T-Notes gapped higher at the re-open, as the space digested vaccine news released in the U.S./Asia crossover. The contract trades +0-05 at 139-17+ after topping out at 139-20.
• USD and JPY outperform in G10 FX basket amid continued demand for safe havens. Antipodeans currencies and NOK struggle for any impetus, GBP is also vulnerable.