Multiple vaccines are suspended at the same time, the U.S. dollar makes unexpected profits
2020-10-14


FX168 Financial News (Hong Kong) News On Wednesday (October 14), in the Asian market in early trading, the price of gold fluctuated below US$1,900 per ounce, and currently rose slightly by 0.13% to US$1893.06. This move consolidated the previous day's decline, which was the biggest decline since October 06. Although nothing can change the market's pessimism, the lack of major catalysts for commodities, and the short pause after a sharp decline, seems to provide a reason for the recent correction.
 
 
 
(30-minute chart of spot gold, source: FX168)
 
Vaccine experiment was suspended again
 
On October 12, Johnson & Johnson’s global official website announced that due to unexplainable diseases among participants, Johnson & Johnson’s new crown vaccine research has been suspended, including the previous phase III clinical trial of ENSEMBLE. Johnson & Johnson said that next, ENSEMBLE's independent data security monitoring committee (DSMB) and the company's internal clinical and security doctors will examine and evaluate the participants' diseases.
 
And just one day later, Eli Lilly also suspended trials of antibody drugs that Trump touted as a "cure" for the new crown for safety reasons. Trump has touted Eli Lilly’s drugs and Regeneron Pharmaceuticals Inc’s antibody therapy. Molly McCully, a spokesperson for Eli Lilly and Company, said in an email statement: “Due to prudent considerations, the Active-3 Independent Data Security Monitoring Board (DSMB) recommends that registration be suspended.” “Lilly supports the independent DSMB’s decision and is cautious. To ensure the safety of patients participating in this study." The active-3 trial is testing patients with new coronary disease who require hospitalization. The company is also testing the drug in nursing homes to see if it can prevent infection among staff and residents.
 
At the same time, European countries have expanded control measures to try to control the epidemic again. The number of infections in Germany increased at the fastest rate since April, the Prime Minister of the Netherlands ordered a partial lockdown, and France also reported a surge in patients requiring intensive care.
 
These news aggravated the negative risk sentiment in the market.
 
U.S. dollar profited from risk aversion
 
Whether it is the US presidential election or the deadline for the Brexit agreement, a series of news headlines with negative risks have made global investors feel pessimistic. The U.S. Congress lacks a consensus on financial aid, and the trade negotiations between the EU and the U.K. show no signs of reaching an agreement, which has also aggravated market concerns.
 
The weak US inflation data, the pessimistic ZEW survey results, and the mixed results of China's trade data have also prompted traders to lean toward a risk-safe view, which in turn helped the US dollar index achieve its highest rise in three weeks. The rise of the dollar dragged down the price of gold and the stock market.
 
In addition, the International Monetary Fund (IMF) revised upwards its outlook on the world economy. It is predicted that the global economy will contract by 4.4% in 2020, compared with the previous forecast of 5.2%. The report also praised China's economic recovery, and it is expected that China's economy will grow by 1.9% this year.
 
Overall, concerns about the absence of aid plans before the US election and the hard Brexit of the United Kingdom, as well as vaccine delays, may continue to plague the market. Therefore, the U.S. dollar may continue its recent gains and may have a negative impact on the price of gold unless there is an unexpected situation on the economic data. At 20:30 in the evening Beijing time, the United States will announce the September Producer Price Index (PPI). In addition, the European Central Bank and Federal Reserve economists will make a series of speeches, which may attract investors' attention.