At the back end of last week, there was some focus from the markets and hope of a breakthrough treatment for Covid-19.
A drug had been announced belonging to Gilead Sciences, known as Remdesivir, which was said to ease patients symptoms of respiratory difficulties and fever. The optimism had been one of the key reasons as to why stocks were gaining.
However, on Thursday, a rush of selling pressure was observed, following reports stating that Gilead Sciences' experimental antiviral drug Remdesivir appears to have been unsuccessful in treating COVID-19 in a late-stage study conducted by the Chinese government. The World Health Organization (WHO) inadvertently posted a summary of results from the study on its website on Thursday before quickly removing the information. That summary stated that "Remdesivir was not associated with clinical or virological benefits."
These reports forced some pressure to the downside in the US indices, as market players were very much pricing in this being successful, or at least praying on that outcome.
Following these yoyo market movements, stocks pushed for a strong finish on Friday, after Gilead Sciences issued a statement, disputing reports that its antiviral drug Remdesivir was found to be ineffective as a treatment for COVID-19 in a clinical trial conducted in China.
Furthermore, a lead investigator as part of the ongoing study said a key U.S. government trial of Gilead Sciences’ experimental coronavirus treatment may yield results as early as mid-May.
What does this mean for the markets?
Given the renewed optimism, US indices are likely to remain supported, with dips to be bought. In the FX space, should this start gathering momentum, the riskier currencies may start to benefit; AUD, NZD, CAD.
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