The spread of vaccination within a country and the vaccination spread between two countries is likely to have implications for economic recovery, and thereby impact financial markets.
Download ReportVaccination, rates, and FX
The spread of vaccination (expressed as share of population covered) within a country and the vaccination spread between two countries (i.e., the difference between the spread of vaccination between them) is likely to have implications for economic recovery, and thereby impact financial markets. We believe the spread of vaccination to impact rates market, while the vaccination spread to have implications for FX market. For India, we see the anticipated ramp up in vaccination from May-21 to provide an upside to g-sec yields with 10Y rate moving close to 6.50% by Mar-22. From FX perspective, EURINR currently displays strong sensitivity to the incremental vaccination spread between EU and India. The sensitivity in case of USDINR and GBPINR is expected to pick up in H2 2021 as the pace of domestic inoculation drive gains momentum.