A lot can happen in two months

Delivered on By Justin Pyvis

Good morning! In an almost instant about-face, QLD Premier Annastacia Palaszczuk told ABC News Breakfast that “We are not shutting the border. We believe that we have the right measures in place and we have the high rate of vaccination.”

Barely ten minutes later Palaszczuk popped up on channel 9’s Today and was asked whether she could guarantee her earlier statement, responding with “Well we hope so.”

Hardly fills you with confidence!

Elsewhere, Daniel Andrews' controversial pandemic laws cleared parliament and he will likely waste no time in declaring a pandemic when his State of Emergency powers expire on 15 December.

We just hope they’re enforced a bit better than the state’s border exemption scheme, which the Victorian Ombudsman said contained:

“…some of the most questionable decisions I have seen in my over seven years as Ombudsman… A complex and constrained bureaucracy meant some outcomes were downright unjust, even inhumane. It appeared to me that the department put significant resources into keeping people out rather than helping them find safe ways to get home.”

😬 Have a great day.

Fully vaccinated (aged 16+)


Reading the tea leaves

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Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing theΒ US S&P500Β was up a little under 2% with all 11 major sectors advancing as fears about Omicron disrupting the recovery were replaced with optimism that it may turn out to be a milder variant.

China’s Premier Li Keqiang also signalled a cooling of trade tensions to mark the 20th anniversary of it joining the World Trade Organisation, saying “the door to opening up will only open wider and wider”.

Locally, theΒ ASX200 gained 0.95% following a strong US lead the night before and another non-decision by the Reserve Bank of Australia (RBA), which will leave rates on hold until at least February while its global peers at least start talking about tightening.

Food for thought

The RBA will have two months to ponder its next move.
The RBA will have two months to ponder its next move. Source

The RBA did what everyone expected yesterday – nothing – as it departs for a two-month holiday before meeting again in February. At that point it will “consider the bond purchase program”, given that by mid-Feb it “will hold a total of $350 billion of bonds issued by the Australian government and the states and territories” (for those who like to keep count, that’s around 30% of the total on issue).

A lot can happen in two months.

None of the lingering inflationary pressures went away when Omicron distracted everyone and even the humble urea has been caught up in the wave – yes, the stuff from urine used in fertilizers and to reduce emissions in diesel engines (it can also be synthesised from natural gas) – reaching prices not seen for over a decade, rising as much as tenfold just last month.

These things tend to cascade, too. If urea gets more expensive, food prices will rise from their already decade-high levels, potentially causing far more serious problems for the world than Omicron.

Speaking of higher prices, the RBA noted that “Housing prices have risen strongly over the past year.”

You don’t say! Yep, the rampant asset price inflation in Australian housing continued to soar in the September quarter, adding a cumulative $A487.0 billion in value (+5.6%) in just one quarter, surpassing $A9 trillion for the first time ever. Annual price growth was 21.7%, “the strongest annual growth since the Residential Property Price Index series commenced in the September quarter 2003”.

It’s all good though, because the soothsayers at the RBA pointed out that “the rate of increase has eased over recent months… [and] the value of housing loan commitments has declined from high levels”.

That’s what tends to happen when you light a fire under housing until it becomes unaffordable to most, even at record-low interest rates, and then starts to burn out.

But that hasn’t seemed to dampen people’s spirits, with the weekly ANZ-Roy Morgan Consumer Confidence index increasingly slightly (+1.4%) on the back of “Australians becoming more confident about their personal financial situations”.

The main worry continues to be inflation expectations, which “rose a touch to 4.9%”, although it “doesn’t seem to have had a major impact on sentiment, unlike what is occurring elsewhere such as in the US”.

Not yet, anyway.

Bits and bytes

πŸ’Έ The NSW government somehow spent over $A14m setting up its Dine & Discover voucher programme. Remember Australia’s COVIDSafe app? Even that great white elephant ‘only’ cost $A9.2m.

πŸ‘©β€πŸ« Teachers and principals in NSW went on strike yesterday for the first time in a decade over a pay dispute, asking for a 5-7.5% wage increase versus the 2.5% offered by the government.

πŸ† A new study published in the journal Nature Aging found that high doses of Viagra may be a useful treatment against Alzheimer’s disease by stimulating brain cell growth and reducing protein accumulation.

πŸ¦— The 5th Ashes test, scheduled for 14-18 January in Perth before WA’s strict border rules caused it to be scrapped, was put out to tender with bids expected from Hobart, Melbourne, Sydney, Brisbane and Canberra.

⚱️ England’s star swing bowler Jimmy Anderson was rested from today’s first Ashes test with a calf niggle.

🚒 Exports from China grew 22% from a year ago in November, above expectations but a slowdown from October’s 27.1%. Imports surged 31.7% as China stocked up on coal (+200.3%) to ease its energy crisis.

🏑 UK house price growth hit a 15-year high in November, adding 3.4% on a quarterly basis “underpinned by a shortage of available properties, a strong labour market and keen competition amongst mortgage providers keeping rates close to historic lows”.

🏭 Germany’s industrial production increased for just the third month this year, rising 2.8% in October from the month prior. But it’s not out of the woods yet, as conditions were so bad “that any single container coming to Germany and every handful of microchips would immediately lead to a pick-up in production.”

πŸ‰ The Canterbury Bulldogs and John Asiata, who was only recently signed and has never played for the club, parted ways “following his refusal to be vaccinated against Covid-19”.

β›ˆοΈ Hawaii’s governor declared a state of emergency due to heavy rains which were “anticipated to continue to cause flooding damage to public and private property”.

πŸ’‰ A new UK study found that mixing COVID-19 vaccines produced a better immune response than having two doses of the same vaccine.

πŸ₯ New Zealand won’t send any government ministers to the Beijing Olympics in 2022 due to a “range of factors but mostly to do with Covid and the fact that the logistics of travel and so on around Covid are not conducive to that kind of trip”.