Market participants have formed a tight consensus on the likely path of 2021. Even if the crowd is slightly wrong about vaccinations reaching the masses in the spring of 2021, unleashing a step up in mobility and economic activity in the second half, it is likely these events are now fully baked into asset prices.
Unless events come as a complete surprise, it is now a more interesting question to ask what 2022 will look like. Despite vaccination programmes, Covid-19 will still be influencing the global economy to some degree in 2022. While 1 billion people are likely to have been vaccinated by the end of 2021, this would still represent only one eighth of the global population. Moreover, vaccinations will be concentrated in countries representing half the global economy, as developed market economies had a headstart in acquiring vaccine stock. Emerging economies play catch-up While 2021 wi...
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