Is a vaccine right round the corner? – Market Analysis – July 15

Markets go all-in on Corona vaccine optimism

Expectations for the discovery of a Coronavirus vaccine have increased considerably since yesterday.

Both the North American company "Moderna" and the Oxford University Institute have commented that they are already in the final phase of a vaccine's approval with practical results for the disease.


In Moderna's case, they announced that they are already conducting tests on patients and that it could be ready for use as soon as within a month.

Although most virologists and scientists consider that it is not plausible to achieve such a result in such a short period, the possibility that it will be successful has been enough to lift investors' mood towards a risk-on scenario.

Trade War Part II

On the negative side, the confrontation between the United States and China continues.

Trump signed a law yesterday to impose sanctions and retaliatory actions against the Asian country for the Hong Kong issue.

And the United Kingdom has banned Huawei for the development of the 5G network, following Washington's recommendations, a fact that has provoked the reaction of the Chinese Finance Minister, who has described this measure as political retaliation.

In the next few months, we will witness events such as these. It is unlikely that a trade agreement with China will be reached in the current circumstances, and its effect on the markets will depend on the degree of escalation of hostilities. In any case, it will be a drag on the recovery.

FX market


But today, the market has leaned towards optimism, and with it, the US Dollar has weakened significantly as expected by most market analysts.

EUR/USD has exceeded the high reached at the beginning of June at 1.1422, and if it stays at these levels in a daily close, it could open the way to higher levels. The outcome of the meeting of European leaders this weekend on the rescue fund will undoubtedly be a catalyst for this bullish move should an agreement be reached.

DollarIndex is in a significant support zone, around 95.70. Below this support, a downward path would begin to take it to the low levels seen in 2018.


Global Indices

Stock markets regain their bullish momentum.

USA500 is close to exceeding the high reached in early June at 3230; above which, the way is open to the index's historic highs.


The same goes for Germany30.

The resistance level to overcome is 12935, a level very close to its current price. Above, the index paves the way to all-time highs too.

In this case, a beneficial agreement on the rescue fund "next generation" as close as possible to that proposed by the European Commission, would serve as a boost.

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