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Bank of Canada holds rate, expecting strong rebound this summer

The Bank of Canada says simple math is making the current economic backdrop look worse than it is in reality, setting up a second taper of its bond-buying program as early as next month.

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The Bank of Canada says simple math is making the current economic backdrop look worse than it is in reality, setting up a second taper of its bond-buying program as early as next month.

Statistics Canada last week reported that gross domestic product (GDP) grew at an annual rate of 5.6 per cent in the first quarter, more than a percentage point slower than the central bank’s forecast . That could have been cause for concern. But rather than emphasize the negative, policy-makers characterized the pace of the recovery in the first quarter as “robust,” suggesting they will continue to gradually reduce the bank’s influence in markets in order to offset inflationary pressures that are building as the economy rebounds from last year’s historic collapse.

“Economic developments have been broadly in line with the outlook,” the central bank said in a new policy statement on June 9. “With vaccinations proceeding at a faster pace, and provincial containment restrictions on an easing path over the summer, the Canadian economy is expected to rebound strongly, led by consumer spending.”

Governor Tiff Macklem and his deputies on the Governing Council said the official tally of GDP came up short of what they were expecting because companies depleted inventories to a greater extent than usual, and because imports were strong. Imports subtract from GDP because money leaves the country to pay for them, but they also imply healthy domestic demand. Low inventories herald future growth, since companies will have to replenish their stores. Bottom line: businesses and households appear to have money to spend.

“The underlying details indicate rising confidence and resilient demand,” the statement said.

To be sure, the Bank of Canada remains concerned about the present state of the economy, as the hole left by the COVID-19 crisis is as yet unfilled.

Policy-makers ended their fourth of eight scheduled interest-rate reviews this year with a decision to stay in a holding pattern until they get further confirmation that the world is unfolding as they assume it will. They reiterated that they intend to leave the benchmark lending rate at a record low of 0.25 per cent until at least the second half of 2022, and they re-upped their commitment to create about $3 billion per week to purchase Government of Canada bonds.

The Bay Street economists who watch the central bank most closely had assumed the Bank of Canada would leave its policies unchanged. Macklem has said that he is prepared to run the economy hot until hiring returns to pre-pandemic levels, and that he assumes the burst in inflation this spring will be a temporary phenomenon. He could adjust his thinking if facts change, but nothing has happened since the Bank of Canada updated its outlook in April that requires a course correction.

“The recovery continues to require extraordinary monetary policy support,” Macklem and his deputies said, as they have in previous statements when they were less optimistic about the economy’s near-term prospects.

The Bank of Canada’s policy stance is aggressive based on its own history, but it has emerged as perhaps the most prudent of the world’s major central banks, deciding in April to taper its weekly bond purchases to $3 billion from $4 billion , while the U.S. Federal Reserve and others show little sign of easing up on stimulus.

Some analysts interpreted the Bank of Canada’s confidence in the economy’s momentum as a sign it is getting ready to pare its bond-buying program again when it next updates interest-rate policies in July.

Like the first quarter, policy-makers said what they have seen so far in April, May and June is in line with their prediction for growth of 3.5 per cent in the second quarter.

But the Bank of Nova Scotia’s real-time forecast, which updates whenever new data are released, is currently tracking growth of about one per cent. And Benjamin Reitzes, an economist at Bank of Montreal, said he predicts little or no growth in the current quarter because of the third wave of COVID-19, which, if right, would mean the central bank will miss its forecast by five percentage points over two quarters.

“The willingness of policy-makers to shrug off what could be a big miss on their first-half growth forecast clearly points to a hawkish bias,” Reitzes said in a note to clients. “We had been expecting the next taper to come in October, as we’ll have precious little evidence of the recovery’s strength in July, but today’s statement suggests the bank wants to act sooner rather than later.”

It makes sense for the Bank of Canada to turn a bit “hawkish.” Its primary mission is to keep the Consumer Price Index (CPI) advancing at an annual pace of about two per cent and in April, the CPI surged to 3.4 per cent, breaching the high end of policy-makers’ comfort zone for the first time since the autumn of 2011.

The Bank of Canada stuck to its view that the recent burst of inflation will pass, maintaining that current year-over-year readings are being exaggerated by the economy’s brush with deflation in 2020. In other words, as with GDP, basic math is making things look worse than they really are.

Still, policy-makers indicated that they are sensitive to the possibility that they could be wrong, going out of their way on June 9 to state that the factors they have previously identified as risks to their inflation outlook “remain relevant.”

Hawkish, indeed.

• Email: kcarmichael@postmedia.com | Twitter:

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Spread & Containment

AstraZeneca antibody cocktail fails to prevent Covid-19 symptoms in large trial

AstraZeneca said a late-stage trial failed to provide evidence that the company’s Covid-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

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Astra antibody cocktail fails to prevent COVID-19 symptoms in large trial

(Reuters; )

June 15 (Reuters) – AstraZeneca (AZN.L) said on Tuesday a late-stage trial failed to provide evidence that its COVID-19 antibody therapy protected people who had contact with an infected person from the disease, a small setback in its efforts to find alternatives to vaccines.

The study assessed whether the therapy, a cocktail of two types of antibodies, could prevent adults who had been exposed to the virus in the past eight days from developing COVID-19 symptoms.

The therapy, AZD7442, was 33% effective in reducing the risk of people developing symptoms compared with a placebo, but that result was not statistically significant — meaning it might have been due to chance and not the therapy.

The Phase III study, which has not been peer reviewed, included 1,121 participants in the United Kingdom and the United States. The vast majority, though not all, were free of the virus at the start of the trial.

Results for a subset of participants who were not infected to begin with was more encouraging but the primary analysis rested on results from all participants.

FILE PHOTO: A computer image created by Nexu Science Communication together with Trinity College in Dublin, shows a model structurally representative of a betacoronavirus which is the type of virus linked to COVID-19, better known as the coronavirus linked to the Wuhan outbreak, shared with Reuters on February 18, 2020. NEXU Science Communication/via REUTERS

“While this trial did not meet the primary endpoint against symptomatic illness, we are encouraged by the protection seen in the PCR negative participants following treatment with AZD7442,” AstraZeneca Executive Vice President Mene Pangalos said in a statement.

The company is banking on further studies to revive the product’s fortunes. Five more trials are ongoing, testing the antibody cocktail as treatment or in prevention.

The next one will likely be from a larger trial testing the product in people with a weakened immune system due to cancer or an organ transplant, who may not benefit from a vaccine.

TARGETED ALTERNATIVES

AZD7442 belongs to a class of drugs called monoclonal antibodies which mimic natural antibodies produced by the body to fight off infections.

Similar therapies developed by rivals Regeneron (REGN.O) and Eli Lilly (LLY.N) have been approved by U.S. regulators for treating unhospitalised COVID patients.

European regulators have also authorised Regeneron’s therapy and are reviewing those developed by partners GlaxoSmithKline (GSK.L) and Vir Biotechnology (VIR.O) as well as by Lilly and Celltrion (068270.KS).

Regeneron is also seeking U.S. authorisation for its therapy as a preventative treatment.

But the AstraZeneca results are a small blow for the drug industry as it tries to find more targeted alternatives to COVID-19 inoculations, particularly for people who may not be able to get vaccinated or those who may have an inadequate response to inoculations.

The Anglo-Swedish drugmaker, which has faced a rollercoaster of challenges with the rollout of its COVID-19 vaccine, is also developing new treatments and repurposing existing drugs to fight the virus.

AstraZeneca also said on Tuesday it was in talks with the U.S. government on “next steps” regarding a $205 million deal to supply up to 500,000 doses of AZD7442. Swiss manufacturer Lonza (LONN.S) was contracted to produce AZD7442.

Shares in the company were largely unchanged on the London Stock Exchange.

The full results will be submitted for publication in a peer-reviewed medical journal, the company said.

Reporting by Vishwadha Chander in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/astrazeneca-says-its-antibody-treatment-failed-in-preventing-covid-19-exposed-2021-06-15

 

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Government

Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration under former President Donald Trump, took on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm…

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Former FDA Head Takes on Exec Role at Flagship’s Preemptive Health Initiative

 

Stephen Hahn, the Commissioner of the U.S. Food and Drug Administration (FDA) under former President Donald Trump, has taken on a new role as chief medical officer of a new health security initiative launched by Flagship Pioneering, a life sciences venture firm that incubates and curates biopharma companies.

First announced Monday, Flagship’s Preemptive Medicine and Health Security initiative aimed at developing products that can help people before they get sick. This division will focus on infectious disease threats and pursue bold treatments for existing diseases, including cancer, obesity, and neurodegeneration. 

In a brief statement, Hahn, who served as commissioner from December 2019 until January 2021, said the importance of investing in innovation and preemptive medications has never been more apparent. 

“In my career I have been a doctor and a researcher foremost and it is an honor to join Flagship Pioneering in its efforts to prioritize innovation, particularly in its Preemptive Medicine and Health Security Initiative. The more we can embrace a “what if …” approach the better we can support and protect the health and well-being of people here in the U.S. and around the world,” Hahn said in a statement. 

During his time at the FDA, Hahn was at the forefront of the government’s effort to battle the COVID-19 pandemic. His office oversaw the regulatory authorization of antivirals, antibody therapeutics and vaccines, as well as diagnostics and other tools to battle the novel coronavirus. 

Kevin Dietsch-Pool/Getty Images

Hahn bore the brunt of verbal barbs aimed at the FDA by the former president for not rushing to authorize a vaccine for COVID-19 ahead of the November 2020 election. The second vaccine authorized by the FDA for COVID-19 was developed by Moderna, a Flagship company. 

Prior to his confirmation as FDA Commissioner, Hahn, a well-respected oncologist, served as chief medical executive of the vaunted The University of Texas MD Anderson Cancer Center. Hahn was named deputy president and chief operating officer in 2017. In that role, he was responsible for the day-to-day operations of the cancer center, which includes managing more than 21,000 employees and a $5.2 billion operating budget. He was promoted to that position two years after joining MD Anderson as division head, department chair and professor of Radiation Oncology. Prior to MD Anderson, Hahn served as head of the radiation oncology department at the University of Pennsylvania’s Perelman School of Medicine.

Flagship Founder and Chief Executive Officer Noubar Afeyan said the COVID-19 pandemic that shut down economies and caused the deaths of more than 3.8 million people across the world was an important reminder that health security is a top global priority. In addition, the ongoing pandemic brings into “stark focus” the importance of preemptive medications. 

Hahn, who helmed the FDA for three years and before that served as chief medical executive at The University of Texas MD Anderson Cancer Center, has extensive experience overseeing clinical and administrative programs. Afeyan said the new division would benefit from Hahn’s experience as FDA Commissioner and help steer the Preemptive Medicine and Health Security initiative as it explores Flagship’s “growing number of explorations and companies in this emerging field.”

It is not unusual for former FDA heads to take prominent roles with companies. For example, former FDA Commissioner Scott Gottlieb, Trump’s first FDA Commissioner, took a position on the Pfizer Board of Directors weeks after departing his government role. He has also taken positions on other boards since then, including Aetion, FasterCures and Illumina.

 

BioSpace source:

https://www.biospace.com/article/former-fda-head-stephen-hahn-takes-cmo-role-at-flagship-pioneering-preemptive-health-initiative-

 

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Government

Five U.S. states had coronavirus infections even before first reported cases – study

At least seven people in five U.S. states were infected with the novel coronavirus weeks before those states reported their first cases, a new government study showed.

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Five U.S. states had coronavirus infections even before first reported cases – study

(Reuters) – At least seven people in five U.S. states were infected with the novel coronavirus weeks before those states reported their first cases, a new government study showed.

Participants who reported antibodies against SARS-CoV-2 were likely exposed to the virus at least several weeks before their sample was taken, as the antibodies do not appear until about two weeks after a person has been infected, the researchers said.

The latest results build on findings from a Centers for Disease Control and Prevention study that suggested the novel coronavirus may have been circulating in the United States last December, well before the first COVID-19 case was diagnosed on Jan. 19, 2020.

A protective face mask lays, as the global outbreak of the coronavirus disease (COVID-19) continues, beside leaves at the lakefront in Chicago, Illinois, U.S., December 6, 2020. REUTERS/Shannon/File Photo

The positive samples came from Illinois, Massachusetts, Mississippi, Pennsylvania and Wisconsin, and were part of a study of more than 24,000 blood samples taken for a National Institutes of Health research program between Jan. 2 and March 18, 2020.

Samples from participants in Illinois were collected on Jan. 7 and Massachusetts on Jan. 8, suggesting that the virus was present in those states as early as late December.

“This study allows us to uncover more information about the beginning of the U.S. epidemic,” said Josh Denny, one of the study authors.

The findings were published in the journal Clinical Infectious Diseases.

Reporting by Mrinalika Roy in Bengaluru; Editing by Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

 

Reuters source:

https://www.reuters.com/business/healthcare-pharmaceuticals/five-us-states-had-coronavirus-infections-even-before-first-reported-cases-study-2021-06-15

 

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