Morning Commentary: Who Should Get the Vaccine First?

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

Who Should Get the Vaccine First? Share this story: Andrew Kositkun Foreign Exchange Head Trader

With COVID-19 vaccine rollouts starting, healthcare workers around the world are struggling with the difficult question of how to prioritize distribution. In answering this question, one has to first define what the goal is. If the goal is to reduce the spread of the virus, then “superspreaders” that have exposure to other people, and so are likely to spread the virus fastest, should be the first people inoculated. Examples of this include young adults, teachers and healthcare workers. On the other hand, if we want to minimize the number of deaths, it would make sense to first immunize vulnerable people, such as the elderly and those with comorbidities. In the U.S., the plan is to protect the vulnerable first, with exceptions for healthcare and essential workers. After this, the CDC is likely to recommend going down the age distribution, with priority given to those with comorbidities. States are widely expected to go along with this plan, in part due to political expediency, as it is easier to justify inoculating vulnerable people than young superspreaders.  The issue is that data from the Pfizer/BioNTech trial suggests this approach could prolong the pandemic. The trial was run by dividing up 40,000 participants into two roughly equal groups, with one group getting the vaccine and one the placebo. In the aggregate, data shows an efficacy rate of 94.6%. However, things get a bit more complicated if you look only at the efficacy for the most vulnerable people. For example, results for the 65–74 and 75+ age groups showed a better outcome for the vaccinated group, but the evidence is weak, as only a small number of people in the placebo group contracted the virus. This leads to a wide 95% confidence interval that includes efficacies below 60% for the 65–74 age group and single-digit efficacies for the 75+ age group. Regarding comorbidities, there is strong evidence that the vaccine is effective on people suffering from obesity, but the confidence interval for the efficacy range of other conditions is very wide. So from a health perspective, it makes sense to vaccinate the most vulnerable population first. Even with a lower efficacy, something is better than nothing. But, from an economic perspective, this strategy could potentially decrease the pace of the economic recovery as some of the vaccine’s initial recipients might be those for whom the vaccine is least effective. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: Congress is set to vote on a roughly $900 billion relief package today. The bill includes money for small businesses, jobless benefits and direct payments of $600 to most Americans. Lawmakers also passed a one-day funding measure to avoid a partial government shutdown. Europe and Canada took steps to block travelers from the U.K. on fears of a faster-spreading mutation of the COVID-19 virus. The U.K.’s biggest ports have stopped traffic, triggering delays in the food supply. London and southeast England were also thrown into last-minute lockdowns. On the Brexit front, yet another “deadline” was missed, as less than two weeks remain until the end of the transition period. For what it’s worth, the U.K. has said it will not seek an extension to the transition period. On the vaccine front, the U.S. will start inoculating people with the Moderna vaccine today as European officials meet to discuss the Pfizer-BioNTech shot. According to World Health Organization officials, there are no indications that the vaccine will be less effective against the new mutation found in the U.K., but it will take more than a week to confirm this. Reports indicate that Russia is pushing for OPEC+ to expand output by another 500,000 barrels a day in February. It is still unclear where Saudi Arabia stands.

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