Delivered on

A tinderbox ready to ignite

Good morning! Parts of Queensland were plunged into a 3-day lockdown yesterday, joining Darwin, Perth and Sydney in lockdown misery, after a 19-year old unvaccinated COVID-19 hospital ward receptionist was found to be infectious and in the community for 10 days. According to state health directives she should have been vaccinated, with QLD Premier Palaszczuk stating that she is "absolutely furious about this".

It's all well and good to have directives, but how about some enforcement? Perhaps less time should be spent issuing fines to people at the beach and more on making sure that those directly exposed to COVID-19 on a daily basis are actually vaccinated and have appropriate protective gear.

Markets

Daily % change

AUD/USD

75.1

-0.8%

10Y Bond

1.48

-1.3%

ASX200

7,301

-0.1%

Brent (bbl)

75.1

+0.7%

Gold (oz)

1,761

-1.0%

Iron ore (t)

206.5

-2.8%

Bitcoin

36,301

+4.9%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract.

Markets were relatively calm yesterday, with the US S&P500 gaining 0.03% as the Delta variant continues to spread around the world, even in mostly-vaccinated countries. Locally, the ASX200 fell nearly 1% in early trade with over half the country in lockdown, before recovering to finish flat at -0.1%.

Housing boom: UK house prices increased by 0.7% in June, taking the annual rate to 13.4% – the fastest in 17 years. It's not just the low base effect in 2020 either, as prices in June were almost 5% higher than in March 2021. The data were similar in the US, with the Case-Shiller property value index climbing 14.6% from a year earlier in April, the 11th straight monthly gain and "the highest reading in more than 30 years".

Stimmy-flation: The July delivery price of hot-rolled coil (steel) in New York rose as much as 0.7% to a record $US1,801 per short ton, having more than tripled over the past year "in a bet that massive US spending to rebuild railroads, highways, and bridges will boost demand for metals".

Digital currencies: Former top Japanese financial regulator Toshihide Endo said if China launches a central bank digital currency it would be "hard to ignore for other nations. Japan and other advanced nations will face the tough question of how quickly they should follow". Former governor of the Bank of Canada and Bank of England Mark Carney echoed those thoughts, stating that "The old normal of cash, bank-based finance and bank payments rails is crumbling".


Thanks for reading Brekky Wrap.
Forwarded this issue? Click here to subscribe.


Analysis

A tinderbox ready to ignite

ScoMo cartoon: It's not a race, until suddenly it is.
It's not a race, until suddenly it is. David Pope/Reddit

The federal government made the AstraZeneca COVID-19 vaccine available to all Australians yesterday, deciding to pick up the tab for any claims made by patients against doctors for their advice concerning the AstraZeneca jab. By our count this is at least the fourth change in advice over the past 19 weeks, with the government also repeatedly playing down the urgency of getting vaccinated:

  • 16 February 2021: The Therapeutic Goods Administration (TGA) approves AstraZeneca for use in Australia, although only for those under 65.
  • 11 March 2021: Health Department secretary Brendan Murphy said "this is not a race", after new evidence emerged about the AstraZeneca vaccine. ScoMo repeated the remark the following day.
  • 17 March 2021: Health Department secretary Brendan Murphy said "we are not in a hurry in Australia".
  • 8 April 2021: The Australian Technical Advisory Group on Immunisation (ATAGI) recommends that AstraZeneca should only be given to adults aged over 50 years.
  • 30 May 2021: Deputy Prime Minister Michael McCormack again said "it is not a race", with Trade Minister Dan Tehan also stating that "you don't describe the vaccine rollout as a race".
  • 17 June 2021: ATAGI recommends that AstraZeneca be given only to those aged over 60 years.
  • 28 June 2021: ScoMo said "we would encourage you to a, go and have that discussion with your GP", about getting AstraZeneca, regardless of age.
  • 29 June 2021: Health Minister Greg Hunt said the medical advice has not changed and Pfizer remained the preferred vaccine for under 60s.

Why this matters: The recent Delta variant outbreak shows why getting the nation vaccinated is very much a race, contrary to the government's statements – a race against the virus and its mutations. Australia is effectively a tinderbox ready to ignite, with just one mistake enough to see over half of the country's population locked down within a week.

Going forward: It's hard to see the latest decision to encourage GPs to recommend the AstraZeneca vaccine to adults of all ages as achieving much, given its reputation has been systematically undermined by the government over the past 19 weeks.

AstraZeneca's reputation is in tatters not just among young people, either – the latest data from Western Australia showed that fewer than 5,500 vaccination appointments are currently booked among over-60s, just 1% of that age group, despite only 58% of the cohort having received a first dose. According to a separate poll conducted over the weekend, just 39% of Western Australians were either "moderately confident" or "extremely confident" in the AstraZeneca vaccine.


The Wrap Up

  • Queensland police accessed contact tracing data from the state's QR code check-in app to investigate a theft. "The government is considering legislative changes to ensure that Queenslanders have complete confidence in relation to privacy matters associated with this app."
  • While normally happy to take credit for the mysterious "advice" on which all decisions are based, this week New South Wales' Deputy Premier John Barilaro threw his bureaucrats under the bus, saying that "last week we lost control of the Delta strain", and "absolutely we could've gone [into lockdown] a week earlier... The reality is on the advice we were getting, that wasn't the advice".
  • New South Wales revealed a lockdown rescue package that "will cost the state hundreds of millions of dollars, includes grants between $5000 and $10,000 for small businesses and payroll tax deferral for all employers".
  • The pandemic is over for elites: Deputy Prime Minister Barnaby Joyce was fined $200 for not wearing a mask in breach of COVID-19 restrictions.
  • Raees Cajee, one of the South African brothers who purportedly ran off with billions in bitcoin, said that no more than $US5 million is unaccounted for and they're in hiding because they received death threats.
  • Facebook rolled out its new newsletter product, Bulletin, to compete with Substack and Twitter's Revue. It is apparently "deliberately trying to avoid political (read: divisive and popular) writers and subjects".
  • The price of 'SafeCoin' – a DeFi stablecoin on the Polygon blockchain that was supposedly algorithmically pegged 1:1 to the US dollar – fell to zero after what appears to be an exploit (one coding error = bye bye crypto).
  • North-west America is struggling through a heat wave, with the temperature hitting 46.6°C in Lytton, British Columbia, a new all-time high for Canada. In Salem, Oregon, the temperature reached 47.2°C, the hottest since record-keeping began in the 1890s.
  • Bali will not be reopened to foreign tourists until COVID-19 cases fall significantly.
  • Abu Dhabi banned unvaccinated people from all public places and schools.

A tinderbox ready to ignite was brought to you by Justin Pyvis. Forwarded this issue? Click here to subscribe.