Tuesday 10 November 2020 4:44 pm

Pfizer's Covid-19 vaccine news set off a $2 trillion trading frenzy on markets

Pfizer’s Covid-19 vaccine breakthrough sparked one of the heaviest trading days since the height of the pandemic crisis yesterday, with nearly $2 trillion changing hands on across global markets.

Traders stampeded to the riskier plays in equities, foreign exchange and bond markets after Pfizer released positive data on its vaccine trial, while rotating out of safe havens such as technology stocks, Japanese yen and top-rated bonds.

Read more: British chemicals firm strikes $100m deal with Pfizer to produce Covid vaccine

“Volumes (are) also surging as programs and baskets go to work to either correct portfolio balances or address margin calls,” said Mark Taylor, a trader at Mirabaud Securities, highlighting a jump in volumes in the airlines and banking sectors.

In the US nearly $500bn worth of trades went through stock markets on Monday, one of the busiest days since March, when coronavirus lockdown fears rattled financial markets. Europe saw $120 billion traded, according to Refinitiv data.

Value stocks, typically companies that are more sensitive to economic cycles, notched their best one-day performance against their growth-focused peers ever in the United States after Monday’s news of an effective vaccine against the coronavirus.

Read more: Boris Johnson urges caution over Pfizer Covid vaccine breakthrough

A similar trend was noticed in the bond and currency markets where volumes matched the panic trading seen during the depths of the market mayhem in March and double that of April when the coronavirus pandemic slammed into markets.

Mirroring March

Total turnover for the 33 currency pairs on CLS, a major settler of trades in the currency markets, totalled $627bn on Monday. Average daily turnover was $707bn in March and $380bn in April.

Bond market turnover also jumped. Nearly 170,000 contracts changed hands on the popular front-month German bund futures contracts, 1.5 times this year’s average, according to Refinitiv data.

Total turnover on German government bonds on Monday totalled nearly €3bn, more than the average since the start of October, according to data from Marketaxess, a major trading platform.

“Turnover was about three times the 30-day average daily volumes in cash and very active in the futures space,” said Jimmy Conway, head of EMEA equity trading strategy at Citibank.

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