Market participants are not so focused on news about the coronavirus anymore. Despite the fact that the virus is still raging in many countries across the globe, traders are shifting their attention to other topics. It seems that everyone is used to the news about a rise or a decline in cases that they do not consider the virus a big risk. Nevertheless, the economic recovery is still very dependent on improvements in the epidemiological situation. Besides, virologists are concerned with constantly emerging new strains. In August and September, there was a slowdown in the economies of some EU countries and the United States. In particular, the EU and US Manufacturing PMI indexes dropped significantly. Economists attributed this drop to the negative consequences of the pandemic. For example, the United States faced a surge in Delta cases in August, and in early September it reached its peak values. The fourth wave almost hit the highs of the third wave, which was the largest. Only in the last few weeks, the virus began to recede. The number of daily cases began to decrease. Now, it amounts to 120,000 per day on average for the last 7 days.
At the same time, top US epidemiologist Anthony Fauci said that the new mu strain may evade antibodies. This means that the vaccines are likely to be ineffective against this strain. Fauci noted that the mu-strain did not pose a serious threat as many people got infected with the delta strain. However, the delta variant was also at first unstudied and then triggered a new wave of the pandemic around the world.
The Fed is sure to take notice of the epidemiological situation when making further decisions on monetary policy. This is why forex, stock, and crypto traders should pay attention to this news. At the last meeting, the regulator decided that it would not start reducing the quantitative easing programe in September. So, the central bank is likely to pump up liquidity into the economy for another month and a half. Therefore, the US dollar may stay weak across the board, while the stock and crypto market will continue to rise. However, if the epidemiological situation worsens, it may extend the duration of the QE program for several more months because of the economic slowdown. In general, it is still early to claim victory over the virus and rejoice that countries have defeated the virus with vaccines. Notably, even the most efficient vaccines cannot guarantee that a person does not get an infection. The efficiency of some vaccines has decreased to 66%. In the US, the third vaccination campaign will begin in the near future. Importantly, antibodies after a vaccine shot weaken within 6-12 months. So, people will have to be vaccinated constantly.
