In a note to its clients, the firm argues that “beyond the immediate impact on risky currencies, the FX market may well differentiate and single out specific beneficiaries”.
Adding that even within the G-10 space, some currencies should benefit more than others with the pound set to be a “major beneficiary” on two reasons.
The first being that the UK government has “good exposure to Pfizer in its broad and deep vaccine portfolio” and the second being that the UK has “struggled the most with managing the pandemic without a vaccine”.
Further noting that “a vaccine could make the biggest difference to the economic outlook in the UK, relative to its peers in G-10”.
Building from that narrative, Deutsche also argues that there will be a “first-order gap” between G-10 countries and emerging markets on the vaccine:
“In EM, governments have not ordered as much, having put more of their eggs in the AstraZeneca basket. Still, Pfizer’s competitive pricing means that many EM governments will be able to purchase significant numbers of doses into next year.”
I would say these are fairly reasonable arguments but it would also come down to how the distribution process works and how accessible the vaccine would be to the general public, not just a case of who gets it first.
It is good to try to think outside the box sometimes but when it comes to a vaccine trade (and for most trades for that matter), perhaps it is best to keep things simple.
Traditional risk assets will definitely still outperform so there’s no harm in sticking with what works best, although the risk there is that it would be a consensus trade so there could be squeezes and pullbacks from time to time.