Traders in Asia on the Edge as they Assess Risks Posed by Omicron

Asian markets are trading in the red as weigh Omicron variant’s strength of potentially spreading across the globe, posing renewed reopening risk.

U.S. infectious disease official, Dr. Anthony Fauci told President Biden on Sunday it will take roughly two weeks to have concrete data on the new coronavirus variant Omicron that has put countries around the world on high alert and dragged financial assets down sharply.

President Biden was briefed on the situation by his COVID task force on Sunday and the officials expects the variant to reach U.S. despite the ban on travelers from Southern Africa.

According to a readout of the briefing, Fauci believes the current vaccines are to provide a certain degree of protection. However, reiterated recommendation of getting booster shots.

Omicron, which was first detected in Southern Africa, has now been confirmed in Australia, Belgium, Botswana, Britain, Denmark, Germany, Hong Kong, Israel, Italy, the Netherlands, France, South Africa, and the United States’ neighbor to the north, Canada.

Fauci told NBC, “it clearly is giving indication that it has the capability of transmitting rapidly. That’s the thing that’s causing us now to be concerned,”.

Moderna Inc., chief medical officer Paul Burton said he suspects the new variant may undermine the strength of the current vaccines. However, if current vaccines are not effective then a reformulated shot could be available as early as new year.

Burton on Sunday said to BBC, “we should know about the ability of the current vaccine to provide protection in the next couple of weeks,”.

According to Reuters, “Pfizer expects to know within two weeks if Omicron is resistant to its current vaccine, others suggest it may take several weeks. Until then markets are likely to remain jittery.”

Since the World Health Organization marked Omicron as “variant of concern”, it could lead to conservative approach to reopening to certain degree.

Goldman Sachs in a report said, “we would monitor the situation in over the next month and do not see the new variant is sufficient reason to make major portfolio changes”. However, Goldman notes “given the time of the year and liquidity as well as policy risks in December, investors could short hedges for growth sensitive risky assets”.

As of midday, the broad market tone across Asia is down with MSCI Asia Pacific Index inched down by 1.62%.