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Assessing the latest developments surrounding the coronavirus, Danske Bank analysts noted that new data from Israel and the UK show that the vaccines are working.

Key quotes

“The vaccination process continues with Israel leading with a vaccination percent of 70%. The US is right now at 13.5%. The UK is ahead in the European race (20%) with EU countries lacking supply.”

“Our base case (which is also the consensus story) remains a long winter with many restrictions but that restrictions will not be re-imposed in the autumn. Analysis so far have found that vaccines are effective against new variants, especially with respect to severe cases, hospitalisations and deaths, which in our view is the most important feature of vaccines. That said, most vaccine producers have started to update the vaccines to target new variants if needed further down the road.”

“Still one of the major tail risks is if vaccines turn out to be ineffective against new mutations. This would mean another ‘lost’ year, as the strong economic comeback would be postponed into 2022 and may imply a significant setback in risk sentiment with investors pricing in a very positive outlook at the moment.”