Morning Report – Wednesday 9th September

Main Headlines

AstraZeneca put a halt to Phase 3 testing of its experimental coronavirus vaccine after a participant in a clinical trial became seriously ill. The vaccine, which AstraZeneca is developing with Oxford University, has been viewed as a leading candidate in the race to bring a viable inoculation to market as part of Operation Warp Speed. The company aims to restart the trial after a review. Investors sent ADRs 8% lower in extended trading.

Social gatherings above six banned in England from 14 September. A law change will ban larger groups meeting anywhere socially indoors or outdoors, the government said. Prime Minister Boris Johnson is expected to give further details at a Downing Street news conference later today.

Stocks struggled in the wake of large losses on Wall Street and concern that a Covid-19 vaccine could be delayed. Treasuries extended gains. Gains in U.S. equity futures indicated Wall Street could recoup a small percentage of the losses seen Tuesday, when the Nasdaq sank almost 5% as the selloff in technology shares gathered steam. Stocks were lower across Asia, though to a lesser extent, as AstraZeneca Plc’s news weighed on sentiment. Brent crude extended losses below $40 amid further signs of a bleak short term outlook.

GBP

The pound weakened to its lowest level in more than a month on investor concerns over Brexit and also as the U.K. prepares to tighten its virus related restrictions. Sterling is highly correlated with risk so the selloff across most asset classes is also adding pressure on the pound. Britain will set out its blueprint for life outside the European Union on Wednesday, publishing legislation a government minister acknowledged would break international law in a “limited way”.

EUR

The euro was steady as investors await Thursday’s European Central Bank meeting with some nervousness. The common currency has lost considerable ground since posting a 28-month high earlier in September. Any hint of concern at the currency’s rise, or that low inflation will require loose policy for a prolonged period could dent the euro further.

USD

The dollar found support on overnight as a stock market slide spooked investors into selling riskier currencies. The moves have made for a nearly 2% bounce in the greenback, against a basket of currencies, from the more than two-year lows it touched earlier in the month.