fxstreet.com 08 Feb, 2021 09:45 am

Stimulus optimism prompts recovery trade, US 10 year heads for 1.2%

Stimulus optimism prompts recovery trade, US 10 year heads for 1.2%
Friday’s disappointing US jobs report doesn’t appear to have dimmed investor appetite for equities, on the contrary, the fact that the report fell sho

AstraZeneca shares appear to be shrugging off another setback this morning around its Oxford vaccine after South Africa suspended its vaccination program after saying that the Astra vaccine is less effective against its own variant, particularly against mild disease.The headlines around the Oxford vaccine have certainly been more negative than positive, particularly around efficacy rates, with French President Emmanuel Macron also casting his own aspersions against it, for reasons only he can know.When it comes to the Oxford vaccine it appears there are a number of people who are attempting to make the perfect, the enemy of the good, which is a little concerning at a time when the Oxford vaccine, from a logistics point of view, is probably the easiest to roll out, given its higher storage temperature.This widening gap appears to be a consequence of increasing expectations of rising inflation pressure, with some early indications of higher prices being reflected in recent prices paid data from the most recent ISM numbers.

Crude oil prices also appear to be getting a lift from all of this recovery optimism, with Brent back at $60 a barrel, however it is hard to escape the elephant in the room which is that these higher prices could well act as a brake on consumer demand, prompting demand destruction, and snuffing out any nascent recovery.Of course, with these higher prices, the consensus and discipline amongst OPEC+ members could well start to fracture as some countries break ranks to ramp up production in order to take advantage of this move higher.

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