Citi discusses its latest take on COVID, vaccines, and the risk market conditions.
"We take a look at the latest virus and vaccination data and think some pricing for renewed Covid waves remains appropriate, especially where there are policy implications. US cases could keep rising and we discuss possible containment measures. China cases are back on the rise and we flag potential implications. The UK is an encouraging reference point as the latest wave looks to have peaked, though we worry about tail risks come Q4," Citi notes.
"Ultimately, the vaccines are still highly effective against severe cases of the delta variant, limiting downside risks for the global economic outlook here. But herd immunity remains hypothetical at this stage and we are cognizant of tail risks due to the tendency of mutation," Citi adds.