Giles Coghlan LLB, Lth, MA
Financial Source
It is different
The Omicron variant has 30 changes to it including a small insertion in the spike protein and three small deletions. Around 50% of these changes are in the receptor-binding domain – this is the part of the spike protein used to bind to human ACE-2, which is the enzyme the coronavirus targets to enter cells and infect a person. If there are mutations here this makes the spike protein less recognizable to the antibodies made in response to either vaccination or natural antibodies. The bottom line is that the Omicron is different.
It is a worry
The concern is that these changes above mean that the virus transmits more quickly. Early PCR tests showed that 90% of 1,100 new cases reported November 24 in a SA province were caused by the new variant. SA President Cyril Ramaphosa said that the average daily cases rose from 500 cases in the previous week to 1,600.
It is also uncertain how bad it is
Being more transmissible is not necessarily a bad thing if the virus has milder effects. It could actually be a good thing as Eamonn pointed out that catching a less severe variant results in lesser illness and then confers ‘immunity’. Anecdotal comments suggest that the variant is not an obvious concern.
Novavax, Moderna, & Johnson & Johnson are all onto testing the new variant against its vaccines. Even the variant is able to evade the current vaccine Moderna’s Chief Medical Officer said a new vaccine variant could be ready early next year.
The one thing that strikes is that this variant news broke over the US Thanksgiving holiday, a natural downtime for economic data and news activity. There are so many unknowns here there is a strong case for both caution and dip-buying. At any rate, note that vaccine companies like Moderna are confident in being able to put in a fresh response even if the variant does evade existing vaccines. This would make dip-buying in NZDJPY attractive around current levels. However, note that the Moderna CEO now thinks that the current vaccine will be much less effective against the variant, so that is a near-term downside in risk.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.