Herd Immunity Threshold Now Expected By Mid-2021

By Jim Reid, chief credit strategist at Deutsche Bank

Monday’s are the new Friday’s. AstraZeneca/Oxford Uni kept the vaccine Monday theme going this morning by revealing their vaccine is effective (70% average) albeit with the tantalising prospect that the technique that suggested 90% effectiveness (half dose first followed by the full dose) could be used for all rather than the 62% effective treatment (two full dosages). In terms of why a half dose might be more effective first it could be with how it better primes the immune system.

Today’s chart of the day updates when we could first vaccinate the vulnerable and then achieve herd immunity in the G10 if we assume that AstraZenenca/Oxford eventually migrates to the 90% efficacy rate, one and a half doses are used, and we assume pre-orders are filled on time for the three vaccines to report so far. Japan and the UK would be first, shortly followed by the US with Australia and the EU lagging a bit but there by around the end of H1. Although logistics may slow things down, remember other vaccines could come on stream and accelerate the process.

For EM much is hanging on AstraZeneca/Oxford. It is substantially cheaper with EM countries being offered it at cost which is part of the reason it has been pre-ordered by so many of them. It has the real opportunity to provide a global solution. If the half dose/full dose technique is proved to be more effective it will also reduce the volume of vaccine used meaning more can go around.

Other advantages are that it uses well known vaccine technology rather than the new m-MRA technique used by Pfizer/BioNTech and Moderna which may encourage wider uptake, and also that it can be stored at fridge temperature for six months relative to the -70C to -20C for Pfizer, and -20C for Moderna (can be stored in a fridge for a week before use).

Overall the Monday news from the last couple of weeks has been an incredible victory for science and a personal view is that we’ll be getting back very close to normal life in Q2 2021.

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