Risk assets (AUD, NZD, CAD, global equities and commodity markets) shot higher on two separate stories that researchers in the UK and China had made significant breakthroughs in the development of a treatment for the novel coronavirus.
According to Chinese TV, a research team at Zhejiang University found an effective drug to treat people with the new coronavirus. Preliminary tests showed that two drugs - Abidol and Darunavir – can effectively inhibit the virus in vitro cell experiments, China’s Changjiang daily reported.
The researchers said that the anti-HIV drug Kelizhi, which is currently being used to treat coronavirus infected patients, is not very effective and has side effects. They recommended that the two new drugs, Abidol and Darunavir, be included in the National Health Commission's treatment program of the novel coronavirus-caused pneumonia.
Moreover, shortly after the reports out of China, Sky News reported a “significant breakthrough” has been made in the race for a coronavirus vaccine by UK scientists. The breakthrough is said to have reduced part of the normal development timeline from “two to three years” to just 14 days.
Professor Robin Shattock, head of mucosal infection and immunity at Imperial College London, said he is now at the stage to start testing the vaccine on animals as early as next week with human studies in the summer if enough funding is secured, reported Sky News.
He told Sky News: "Conventional approaches usually take at least two to three years before you even get to the clinic. And we've gone from that sequence to generating a candidate in the laboratory in 14 days.”
“We will have it in animal models by the beginning of next week” he continued, adding “we've short-tracked that part. The next phase will be to move that from early animal testing into the first human studies and we think with adequate funding we could do that in a period of a few months."
The article did, however, note that the vaccine would not be ready in time for this outbreak, rather it would be ready for a future outbreak.
Naturally, haven assets (JPY, CHF, gold, and bonds) were slammed on the news, but some commentators are skeptical. When questioned on this morning’s breakthrough, WHO said that there remains no effective cure for coronavirus, in direct contravention of this morning’s reports out of China. Moreover, given that the UK vaccine won’t be ready for months, we cannot bank on that either.
Looking ahead, until we get more information on these Chinese treatments and how soon the UK vaccine can be made available, I would be cautious about jumping onto any risk on moves just yet.