Risk-off returns as Moderna CEO makes glum prediction

Stéphane Bancel, CEO of Moderna said that the current crop of vaccines will struggle to tackle the Omicron variant due to the high number of mutations on the spike protein. Whilst he admits we still need to wait for the data he also added that all of the scientists he has spoken with have agreed that “this is not going to be good”.

It has been noted that he said similar comments live on CNBC yesterday, but markets have clearly taken them much more seriously from the Financial Times. It could simply be bots reacting to headlines, or favouring one news outlet over another. Make of that what you will. 

Investors have flocked to the Japanese yen, Swiss franc, gold and bonds as classic risk-off plays ensue. US futures are now down around -1.4% with the S&P 500 E-mini futures erasing all of yesterday’s gains within an hour. We still need to see how European traders react but, if the recent pattern of bearish moves beginning in Asia persists, it might not be a pretty session for the bull camp.

WTI filled the liquidity gap up to $73 highlighted yesterday before topping out. After meandering around $70 bearish momentum has now returned in line with its dominant trend which suggest the swing high is in place at around $73. Next major support is around $64, but we need to see prices break Friday’s low to confirm trend continuation.

AUD/JPY – the classic barometer of risk – has resumed its downtrend on the four-hour chart. After finding resistance around the monthly pivot point, prices have broken out of compression to the downside. Our bias remains bearish below 81.40, although 80 may provide interim support ahead of the monthly S1 pivot. But if this is a true risk-off move then it should make light work of such levels.