- Europe’s Three Largest Stop the Use of AstraZeneca’s Covid-19 Vaccine
- EU Takes Legal Action Against Britain for Brexit Violation
- Bond Yields Retreat From the Scene While Equity Markets are Back in the Headlines
Europe’s Three Largest Stop the Use of AstraZeneca’s Covid-19 Vaccine
France, Italy and Germany became the latest major European countries to block AstraZeneca’s Covid-19 vaccines over reports of dangerous blood clots in some recipients, though the company and European regulators said there is no evidence the shot is to blame.
The decision was based on the recommendation of the Paul Ehrlich Institute, which is in charge of monitoring vaccine safety, according to a statement released by the German Ministry of Health. The vaccine has been banned in many countries, including the Netherlands and Ireland, due to concerns that it increases the risk of blood clotting.
“After new reports of thromboses of the cerebral veins in connection with the vaccination in Germany and Europe, the PEI considers further investigations to be necessary,” said the health ministry. “The European Medicines Agency will decide whether and how the new findings will affect the approval of the vaccine,” it added.
“The decision has been made… to suspend the use of the AstraZeneca vaccine as a precaution, hoping that we can resume it quickly if the judgement of the EMA allows it,” French President Emmanuel Macron said at a press conference.
Italy, too, suspended the use of the AstraZeneca vaccine on Monday, becoming the first European country to do so after reports of illness among recipients. The Italian medicines authority AIFA said it was taking the decision as a “precautionary and temporary measure” pending rulings by the European Medicines Agency.
Several European countries – including Denmark, Norway, Ireland and the Netherlands – had already suspended usage of the shots, which were jointly developed with the University of Oxford. Estonia, Latvia, Lithuania and Luxembourg have also put the vaccine on hold.
Both AstraZeneca and Oxford have confirmed that their vaccine has no connection to blood clotting. The European Medicines Agency and the World Health Organization have both stated that the vaccine did not cause the clots, based on the available data, and that citizens should continue to be immunized based on the available evidence.
EU Takes Legal Action Against Britain for Brexit Violation
The European Union said Monday it is starting legal action against the United Kingdom, arguing it does not respect the conditions of the Brexit withdrawal agreement and is violating international law, after Boris Johnson announced he would renege on parts of the deal he signed last year.
It follows Britain’s unilateral decision to delay implementing a key part of the Brexit deal relating to Northern Ireland. The move could ultimately lead to financial penalties or trade tariffs being imposed on the UK.
Earlier this month the UK moved to unilaterally change parts of the deal to better suit British businesses – provoking anger on the other side of the channel. Describing the move as a “serious” violation of the agreement, the European Commission on Monday fired the starting gun on legal proceedings by sending two formal letters. The move could ultimately lead to financial penalties or trade tariffs being imposed on the UK.
“The recent measures once again set the U.K. on a path of a deliberate breach of its international law obligations and the duty of good faith,” European Commission Vice President Maros Sefcovic wrote in a letter to the U.K. setting out the measures.
The European Union took legal action against Britain less than three months after Brexit was officially completed. This decision came just after Britain’s unilateral decision to delay implementation of a significant part of the Brexit agreement on Northern Ireland.
It was stated that the unilateral decision taken by the UK could lead to financial penalties or the implementation of trade tariffs. The dispute is expected to worsen the already problematic relations between the EU and the UK regarding the export of Covid-19 vaccines. Although the post-Brexit trade agreement, signed by both parties on December 24, entered into force on January 1, the deal has not been officially ratified by the EU.
Northern Ireland remained in the EU’s customs union and single market under the Brexit agreement. This decision eliminated the need for border controls in commercial activities between the EU and Ireland, and caused delays and disruptions in goods arriving from the UK to Ireland.
However, the UK has maintained changes it made to Northern Ireland’s trading arrangements are “lawful” and “well precedented” after the European Union launched legal action against it.
Johnson’s spokesperson Jamie Davies told reporters on Monday that Britain adheres to the Northern Ireland protocol, but they want to see problematic areas addressed. He added that the measures taken by the government were “temporary” and “operational” steps designed to “minimize disruption.”
Bond Yields Retreat From the Scene While Equity Markets are Back in the Headlines
While bond yields retreat ahead of the Fed meeting, which is the most important agenda item of the week in global markets, as optimism about the global economic outlook pushed stocks to new records.
The S&P 500 index rose 0.7 percent on Monday, on the fifth trading day. The Nasdaq 100 closed the day with 1.1 percent surplus, led by Apple, Tesla and Facebook. In the morning, S&P 500 futures followed a flat course while Nasdaq 100 futures increased slightly. The MSCI Asia Pacific Index rose moderately on the Japanese and Chinese Stock Markets. The US 10-year bond yield fell two basis points to 1.59 percent.
The big test of the profitability of these wagers is set to come Wednesday, when the Fed wraps up a two-day meeting. The interest rate estimates of the members will be on the radar of investors as well as the interest rate decision by the Fed members to be announced on Wednesday. Fed members, who announced their estimates last December, expected interest rates to be kept close to zero until the end of 2023 as a median. However, the prices in the markets are increasingly disconnected from the Fed estimates.
With the expectation that vaccination and the $1.9 trillion incentive in the US will increase growth and inflation, an earlier rate hike is reflected in money markets pricing. According to money markets pricing, investors think the Fed may increase interest rates by the end of 2022.
In longer maturities, the 10-year Treasury yield — a benchmark for borrowing costs worldwide — touched 1.64% last week, the highest since February 2020. There was also a dramatic surge in five-year rates as traders pulled forward bets on when the central bank would exit its ultra-loose stance.
10-year US bond options in the money markets also point to higher bond yields. According to option investments, the US 10-year return may increase up to 1.85 percent in the coming months.
Commenting on the movements in the money markets, TJM Institutional Securities David Robin stated that “The market has no patience for the Fed being patient.’’ If Chair Jerome Powell on Wednesday “pushes back on the current pricing, the markets will likely think he is in denial and therefore accelerate the timing and the magnitude of the Fed’s first rate increase.”
The bond market is about to get a rude awakening, with traders leaning towards higher long-term yields and a scenario in which the Federal Reserve begins raising rates from near zero well before officials now envision.
Officials on Wednesday are expected to upgrade their quarterly forecasts for growth and unemployment. Still, economists surveyed by Bloomberg, say the central bank will continue to project that it’ll hold rates near zero through 2023. The forecasts will be published at 2 p.m. Wednesday New York time, alongside the Federal Open Market Committee’s policy statement.