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Canada has just approved an updated COVID-19 vaccine to target the first highly contagious Omicron variant, with doses expected to start rolling out within days. But what exactly can we expect from these new shots when they land in the real world?
The updated Moderna vaccine is a combination of two strains, also known as a “bivalent” vaccine, that targets both the original virus and the Omicron variant BA.1 that emerged late last year and drove the largest wave of infection and hospitalization in the pandemic.
While the new shot doesn’t directly target dominant Omicron subvariants BA.4 and BA.5, which the U.S. approved an updated shot for this week, Pfizer submitted an application for Health Canada approval for its BA.4-5 vaccine Friday and Moderna is expected to soon.
“The evidence we have to date shows that the bivalent vaccine with BA.1 offers good protection against BA.4 and BA.5,” Deputy Chief Public Health Officer Dr. Howard Njoo said during a technical briefing Thursday.
“Certainly as the situation evolves we’ll have to look at the evidence and see what happens with real-world effectiveness.”
But what an updated booster can do for you depends on how vulnerable your immune system is, whether you’re one of the millions of Canadians who’ve recently been infected with COVID and when you last had a vaccine.
WATCH | Health Canada approves updated vaccine targeting Omicron variant:
Health Canada has approved a new bivalent COVID-19 vaccine from Moderna, which targets the Omicron variant. It’s the first vaccine of its type in Canada, but officials say another batch of booster shots, specifically targeting Omicron’s BA.4 and BA.5 subvariants, could arrive later this fall.
Will updated vaccines stop COVID spread?
Infectious diseases experts, virologists, epidemiologists and immunologists are hopeful updated vaccines will be more effective at preventing transmission than the original shots — at least initially — but also caution Canadians not to expect them to be a silver bullet.
With limited data on the impact these vaccines will have, all eyes will be on the effect they have on slowing rates of infection and transmission and whether they better protect vulnerable groups in the population heading into the fall and winter months.
“We do not know what the impact is because that is not available,” Chief Public Health Officer Dr. Theresa Tam said during a news conference Thursday when asked by CBC News how effective the updated vaccines will be at stopping the spread of the virus.
Tam said she is hopeful that the new bivalent BA.1-targeted vaccine from Moderna boosts protection against infection and transmission — at least through the fall.
Clinical trial data on the BA.1-targeted vaccines from Moderna and Pfizer-BioNTech suggests they provide slightly stronger immune protection against Omicron than the original vaccines, but exactly what that translates to in the real world remains to be seen.
“The immune responses to these variant-tuned boosters are modestly encouraging, but we are still waiting for definitive clinical evidence,” said Dr. David Naylor, who co-chairs the federal government’s COVID-19 Immunity Task Force.
“That said, even if their marginal advantages are small, they could have a meaningfully positive impact if their novelty rekindles public interest in getting boosted.”
A new preprint modelling study, that has not been peer reviewed, suggested that updated vaccines may not be much more effective than existing boosters in a population with hybrid immunity from vaccination and infection — especially when it comes to protection against severe illness.
But that could still lead to significant protection at a population level, with the preprint also suggesting that for every 1,000 people vaccinated with an updated booster, an average of eight fewer people would be hospitalized compared with the original vaccines.
“We don’t know yet the magnitude of this improvement, but it will likely be pretty limited,” said Dr. Gaston De Serres, an epidemiologist at the Quebec National Institute of Public Health (INSPQ).
“Especially against severe outcomes like hospitalization for which, up until now, the original [vaccines] have been quite successful.”
What can updated COVID vaccines do for you?
More than half of Canadians have been infected with COVID since the emergence of Omicron and its highly contagious subvariants, and the added protection from prior infection in a vaccinated population appears to be providing an edge.
A new research letter published in the New England Journal of Medicine looked at the risk of BA.5 infection among people in Portugal who had a prior infection with past variants, including BA.1 and BA.2, and found they had strong protection against the newer variant.
That’s in part because Portugal has such high levels of vaccination, with more than 98 per cent of the population studied having at least two doses, meaning that much like in Canada our high levels of two-dose vaccination and infection provide strong immune protection.
Two Canadian preprint studies from May and June, which have not been peer reviewed, also found prior Omicron infections provided robust immunity against future reinfection and hospitalization — especially when combined with vaccination.
“In general, we can anticipate that those who have hybrid immunity are going to be better protected,” said Dr. Danuta Skowronski, a vaccine effectiveness expert and epidemiology lead at the B.C. Centre for Disease Control and co-author of the preprints.
“And it is also true that vaccine strains that are a better match to the circulating variant will likely provide better protection.”
The longer you wait after your last infection or vaccination is also important to consider, with emerging evidence suggesting getting a booster too closely after being infected or vaccinated can impact how effective the shot is.
A new small preprint study, which has not been peer reviewed, found that getting a booster within two months of an infection could negatively impact B cells that help generate immune protection against severe disease.
“As we start to head into the fall and we start to see almost certainly cases rise again, the updated booster is definitely going to be better than not getting a booster at all,” said Deepta Bhattacharya, an immunobiology professor at the University of Arizona.
“Given that BA.5 is still circulating, I don’t see that there’s really any downside at all to picking up these boosters and they’ll probably work better than just another shot of the original.”
Bill Hanage, an epidemiologist at Harvard’s T.H. Chan School of Public Health in Boston, said it’s important to consider that even though the original vaccines were far from an exact match to Omicron — they still provided strong protection against severe illness.
“But the closer matches now should do more,” he said in an email. “Notably, there may well be a period following the shot when people are immune to infection.”
Bhattacharya said the “big question” that is top of mind right now is how effective the updated vaccines will be at stopping transmission in the real world — and for how long.
“Do we start to restore some of the protection against any infection or symptomatic infection with these boosters? I expect we will,” he said. “Exactly how long that effect will last, I think, is to be determined.”
Dr. Allison McGeer, a medical microbiologist and infectious disease specialist at Toronto’s Mount Sinai Hospital, said the updated shots may provide a slight boost in neutralizing antibodies that can prevent transmission — and that added protection is “not nothing.”
“An extra dose of the original vaccine results in substantial increased protection against BA.4 and BA.5. It’s not perfect, but I think we’re finding out nothing is perfect,” she said. “The bivalent vaccines, they may be a little better, but they’re not going to be a miracle.”
Bhattacharya said that while clinical trials showed there is only about a twofold increase in protective antibodies against the BA.1, BA.4 and BA.5 variants targeted by Moderna and Pfiizer in their bivalent vaccines — it’s still significant protection.
“If you look at the data, it’s a ton more antibodies that are being made,” he said. “So I have every reason to expect that they will help — and probably help a lot.”
(Kitco News) – The U.S. dollar’s unrelenting rally to 20-year highs is taking its toll on the gold market as prices prepare to end the week near their lowest point since April 2020.
The greenback’s extraordinary momentum and rising bond yields have shifted sentiment among Wall Street analysts to the bearish side. At the same time, retail investors are slightly more optimistic that prices can push higher next week, according to the latest Kitco News Weekly Gold Survey.
This week, a total of 19 market professionals took part in Kitco News’ Wall Street survey. Ten analysts, or 53%, said they were bearish on gold next week. At the same time, six analysts, or 32%, said they expect higher prices in the near term and three, or 16%, neutral on the precious metal.
On the retail side, 963 respondents took part in online polls. A total of469 voters, or 49%, called for gold to rise. Another 341, or 35%, predicted gold would fall. The remaining 153 voters, or 16%, called for a sideways market.
Sentiment among retail investors has improved from the previous week as bearish sentiment has a slight advantage. December gold futures last traded at $1,655.70 an ounce, down nearly 1.7% from last week.
It has been a volatile week for the gold market as the precious metal managed to hold critical support levels even after the Federal Reserve raised interest rates by 75 basis points and signaled that the Fed Funds rate could peak above 4.5% next year.
Many analysts said that gold has been able to withstand the U.S. central bank’s aggressive monetary policy stance as the threat of a recession continues to grow. Federal Reserve Chair Jerome Powell said he didn’t know if the central bank’s action will push the U.S. economy into a recession, but he added that consumers should expect to see some pain as lower growth is needed to cool inflation.
Analysts said that the threat of a recession created some initial safe-haven demand for gold. However, that sentiment has been overwhelmed by volatility in global currency markets as the British pound saw the biggest price drop since 2016, when the nation voted to leave the European Union.
The selloff was triggered after Chancellor Kwasi Kwarteng revealed the government’s new budget with spending commitments ranging between £36 to £45 billion in the next four fiscal years. The massive spending initiative will be paid for with new debt.
“Today’s announcement shows that right now, the U.S. dollar is the only game in town and this will continue to make it difficult for the U.S. dollar,” said Phillip Streible, chief market strategist at Blue Line Futures.
It’s not just gold; analysts note the U.S. dollar’s dominance can be felt in the broad-based selloff throughout the commodity sector.
Although there is still some optimism in the marketplace as many see gold as oversold at current levels, many of the bulls see any rally as a short-term correction.
“We are bound to see a correction in bonds with 10-year yields up 33 bp in just one week while the dollar, sharply higher, is toying with the overbought territory,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Although Hansen is bullish on gold in the near term, he added, “There will be no prolonged recovery until we reach peak hawkishness, potentially still a few months away.”
Marc Chandler, managing director at Bannockburn Global Forex, said he sees a short-term bounce as bond yields consolidate. However, he added that he is watching to see if support at $1,650 can hold.
“A break of that can see $1600-$1620,” he said. “It may be too early to think a significant low in place in gold.”
Many analysts are bearish on gold as they expect the U.S. dollar can still move higher.
“Friday saw the greenback post its highest mark since May 2002 despite being sharply overbought from a technical point of view. If the dollar pulls back next week, gold could rally,” said Darin Newsome, president of Darin Newsom Analysis. “But until that happens, I’ll continue to follow Newton’s First Law of Motion applied to markets: A trending market will stay in that trend until acted upon by an outside force. And for now, the trend of the dollar is up and gold is down.”
Colin Cieszynski, chief market strategist at SIA Wealth Management, said he is bearish on gold as the precious metal has seen some significant technical damage.
“As much as I think USD is getting overbought and due for a correction, gold not only broke down below $1,680, it also dropped under its 200-day moving average, and those are just too technically significant and bearish to ignore,” he said.
Fears of slower economic growth and a recession in Europe spooked oil markets.
A third consecutive 75bps interest rate hike by the U.S. Fed forced crude prices lower earlier this week.
Oil prices dipped by 5% early on Friday, with the U.S. benchmark slumping to the lowest level since January, on the back of heightened concerns about slowing economic growth and recessions looming.
As of 10:06 a.m. ET on Friday, WTI Crude had dipped below the $80 a barrel mark, and was trading down by 5.58% at $78.83 per barrel. Brent Crude, the international benchmark, was at $86.11, down by 4.81% on the day.
The front-month WTI contract was headed to a drop of more than 5% this week, in which fears of slowing oil demand amid possible recessions trumped the escalation of the Russian war in Ukraine.
Oil prices jumped earlier this week when Vladimir Putin ordered a “partial mobilization” of 300,000 men to send to fight in Ukraine in the first mass draft in Russia since World War II. Putin also hinted at the possibility of using “any means” to defend Russia, which analysts interpreted as a threat he could use nuclear weapons.
Yet, oil prices fell later in the week on the strong dollar and fears of a recession intensified with major central banks hiking interest rates again to fight inflation. This week, the Fed raised the key rate by another 75 basis points for a third consecutive time. On the following day, the Bank of England raised rates by 50 basis points to 2.25%, the highest rate since the start of the 2008 financial crisis.
“Crude oil meanwhile headed lower after spending most of the week confined to a relative tight range with the Powell versus Putin battle (demand versus supply) not having a clear winner until Friday when both Brent and WTI dropped as the FOMC driven slump in risk appetite and growth angst was dialed up a notch as the dollar and yields continued to surge higher,” Ole Hansen, Head of Commodity Strategy at Saxo Bank said in a weekly commodities note on Friday.
“A difficult and potentially volatile quarter awaits with multiple and contradictory uncertainties having their say in the direction. While the risk to growth is being priced in, the market has left it to another day to worry about the supply-reducing impact of an EU embargo on Russian oil and fuel as well as a part reversal of the US selling 180 million barrels from its Strategic Reserves,” Hansen added.
(Kitco News) – Gold is trading near 2.5-year lows after a hawkish Federal Reserve sent the U.S. dollar and Treasury yields higher. This macro environment is likely to push more people away from gold, creating a great buying opportunity, according to analysts.
Volatility in the markets and dramatic FX plays did not leave gold untouched as the precious metal fell another 1.7% this week. After raising rates by 75 basis points for the third time in a row, the Fed upped its funds rate to 4.4% by the end of 2022 and to 4.6% in 2023.
For markets, this could translate into another 75-basis-point hike in November and an additional 50-basis-point increase in December.
“We’ve seen significant increases in the markets’ estimates of what the federal funds rate will do over the next year. It is quite a big difference from a month ago, and it is in line with the Fed being more aggressive,” TD Securities global head of commodity markets strategy Bart Melek told Kitco News. “The real rates are rising. That’s negative for gold. High cost of carry and high opportunity cost will probably drive capital away.”
Also, this type of hawkishness means that the peak in the U.S. dollar rally is still some time away, which is bad news for gold.
“Looks like this dollar rally is not peaking. The current market environment will likely remain unsettling. Fed rate hike expectations are widely swinging. We are not going to see that ease up until we see inflation come down,” OANDA senior market analyst Edward Moya told Kitco News. “The problem is that we do not see the economy weaken quickly. When we do, that’s when you’ll see a peak in the dollar. For gold, it is all about when we see that.”
With the Dow touching the lowest level of the year Friday and more volatility ahead, gold is unlikely to see a strong rally in the short term. “We will not get a strong rush to buy gold just yet. There are low volatility instruments out there that are now giving you some yield. That is taking away from gold,” Moya added.
Eventually, gold will become a safe haven again as the appetite for equities wanes. But before that happens, the economy needs to slow, and inflation needs to decelerate. “Once we start seeing inflation moving into a more benign type level, the Fed can quickly turn. As they went from dovish to hawkish, they can go the other way. But it is unlikely any time soon,” Melek pointed out.
The big risk for the precious metal is a drop below $1,600 an ounce. “If we break $1,600, then $1,540 would be the line in the sand where we start to see buyers emerge. Gold will benefit from safe-haven flows abroad,” said Moya.
Melek also sees gold falling below $1,600 an ounce as likely. “Volatility will be higher going forward. As volatility increases, margin calls increase. Long positions can’t be extended. We are not going to see a big reentrance of positions. Nasty environment for gold,” he described.
Gold is watching the upcoming employment and inflation data from September. “The market is still looking at very tight labor conditions in the U.S. and implication that wage pressures will continue to be an issue,” Melek said.
Market consensus calls are looking for the U.S. economy to have created 300,000 positions in September, with the unemployment rate at 3.5%, which is near 50-year lows.
On a positive note, gold at these levels is a great entry point for buyers.
“This makes physical gold cheaper. It’s a buying opportunity. The Fed has been stressing that they have a dual mandate. And as inflation gets under control, the Fed could be quick to reverse in 2023. Real rates will be much more friendly to gold. I do expect gold to do well in the long-term,” Melek said.
However, for now, resistance is at $1,678-80, and support is around the $1,580 an ounce level, he added.
Next week’s data
Tuesday: Fed Chair Powell speaks, U.S. durable goods orders, CB consumer confidence, new home sales Wednesday: U.S. pending home sales Thursday: U.S. jobless claims, GDP Q2 Friday: U.S. persoanl income and PCE price index, Michigan consumer sentiment
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