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Vaccine Monday


Risk assets get a boost, much like a week ago. Tsys gapped lower, equities plowed higher (ESZ0 +48.0) on back of Moderna headlines: vaccine more stable at normal refrigerated temps (36F-46F) and for longer period (30 days) as well as near 95% efficacy compared to Pfizer's 90%.

  • Ostensibly better news, markets did not react anywhere near with as much euphoria as last week: Tsy futures recovered half the initial move and traded sideways through the close while equities looked to finish higher on the day were back near pre-announcement levels in late trade (ESZ0 +32.0).
  • Sources posited the reason for the lack of follow through is that as chances of a vaccine grow, chances of additional fiscal remedies decline. Needless to say, the surge in cases globally is still going to weigh on economies while markets await distribution of a vaccine to the broader populace.
  • Multiple fed speakers this week, little react Mon w/Clarida underscoring lower for longer, yield curve control in their toolkit but not needed at the moment. The 2-Yr yield is down 0.2bps at 0.1771%, 5-Yr is up 0bps at 0.4063%, 10-Yr is up 0.8bps at 0.9045%, and 30-Yr is up 1.1bps at 1.6582%.

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