Good morning. Encouraging vaccine news, a busy time for oil markets and Bitcoin’s backers get a little bearish. Here’s what’s moving markets.
The Covid-19 vaccine made by Pfizer and BioNTech appears to stop the vast majority of people becoming infected, according to an Israeli study, providing the first indication that immunization will curb the spread of the virus. Vaccinations are getting underway in Australia and Italy’s new government is said to be taking inspiration from the rapid rollout in the U.K. as it seeks to ramp up its own program. In the U.K. itself, the government is still urging a “cautious” approach to easing lockdown restrictions as it said all adults will be offered a shot by the end of July. It is also planning for a future when mass testing will become part of normal life and is expected to announce schools will return from March 8.
Another busy week is ahead for oil markets. Saudi Arabia and Russia remain on opposite sides of the debate about crude output ahead of an OPEC+ meeting in March, with Riyadh said to prefer keeping output steady while Russia wants to proceed with a supply increase. Iran is also set to take part in the meeting amid ongoing wrangling about talks with the U.S. on its nuclear program. Attention will also remain on Texas as the state tries to recover from the extreme weather which has hit it in recent weeks, with concerns about the emissions restarting plants will produce and questions to be addressed on the resilience of grids as the world pushes towards electrification.
Bitcoin prices touched another record over the weekend after the cryptocurrency hit $1 trillion in market value. That’s prompted a hint of bearishness from one of Bitcoin’s biggest backers, Tesla’s Elon Musk, who said in a tweet that prices of both Bitcoin and Ether “seem high.” The success of North America’s first Bitcoin exchange-traded fund last week highlighted the attention the crypto market is garnering and put Canada in a position to lead this new part of the market. The crypto fervor also drew comparison to the retail-trading frenzy exemplified by GameStop and, neatly enough, Tesla.
Yields and Inflation
Obstacles standing in the way of higher U.S. Treasury yields appear to be slowly melting away and could continue to move in that direction with the vaccination program rolling out, the prospect of this allowing businesses to reopen and additional fiscal stimulus plans. That’s creating a headache which is sharpening the focus of emerging-market investors. Nervousness about inflation is also percolating for both bond and stock investors. It’s likely to be among the key topics when Federal Reserve Chair Jerome Powell gives his first congressional testimony of the Biden era. For stocks, this is not always a bad thing and could spark investors into parsing the market for the sectors that will benefit from price pressures perking…