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Blaming the advice

Good morning! The lockdown of Greater Sydney was officially extended for a further two weeks yesterday, bringing to total time in lockdown to at least five weeks.

Asked whether the lockdown could run even longer, NSW Premier Gladys Berejiklian deflected to advice received from NSW Health, that: "We will know at the end of two weeks to what extent we need to extend the lockdown, whether there is any chance of face-to-face schooling."

It also appears to have spread to Victoria, with restrictions introduced after 11 new local COVID-19 cases were reported.

Fingers crossed 🤞.

Markets

Daily % change

AUD/USD

74.9

+0.5%

10Y Bond

1.29

-6.5%

ASX200

7,355

+0.3%

Brent (bbl)

74.5

-2.5%

Gold (oz)

1,829

+1.2%

Iron ore (t)

210.5

0.0%

Bitcoin

32,838

+1.3%

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

US markets shrugged off soaring producer prices – the largest annual increase in more than 10 years due to higher commodity prices and increased labour costs – with the S&P500 closing up 0.12% last night. Questioned about the risks of inflation, Fed chair Jay Powell reiterated that the high readings are due to "production bottlenecks or other supply constraints", i.e. "transitory".

Here comes Apple: Australia's buy now, pay later sector – which will soon count the Commonwealth Bank and PayPal as members – will now also have to contend with Apple, which is planning to launch "Apple Pay Later", a service that will allow users to repay Apple Pay purchases in instalments.

Consumers confident: According to the Westpac-Melbourne Institute consumer sentiment index, Australian consumer confidence rose 1.5% in early July (the survey was conducted between 5-9 July) despite the start of Sydney's lockdown.

Inflation surprise: The UK's consumer price index increased 2.5% on the year in June, its second consecutive month above the Bank of England's target of 2% and ahead of analysts' forecasts of 2.2%.

Kiwis tapering: The Reserve Bank of New Zealand (RBNZ) cut short its $NZ100 billion bond buying programme, with some analysts now forecasting an increase to the cash rate as soon as August. In making its decision, the RBNZ argued that "the major downside risks of deflation and high unemployment have receded".


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Feature

Blaming the advice

Cartoon on the government's most recent COVID-19 advertising campaigns.
Even the (very late) vaccination advertising campaign was poorly thought out. Reddit/Cathy Wilcox

We all know that Australia's vaccine rollout has been, to use ScoMo's words, "glacial" – the worst in the 38-member OECD, in fact. We were slow to get our orders in and even when we did, we didn't sufficiently diversify our supply.

Then there was the constant mixed messaging concerning the AstraZeneca vaccine, which on Tuesday changed yet again to recommend adults younger than 60 years old who can't access Pfizer and are in an outbreak (e.g. Sydney) should get the AstraZeneca jab and book in for a second dose after 4-8 weeks, not the previously recommended 12.

Not wanting to take the blame for that as well, ScoMo yesterday insisted that the advice he received from ATAGI – the government's independent immunisation advisory group – "put us behind and we wish that wasn't the result but it was".

Why this matters: There will be a federal election within the next ~10 months. While ScoMo will probably deflect blame for COVID-19 outbreaks to the states, it's much more difficult for him to hide from the dismal vaccine rollout. So he started hitting the airwaves this week, telling Ray Hadley on 2GB radio that ATAGI's advice had been "very cautious", and "that had a massive impact on the rollout of the vaccine program, it really did".

He's partially right – the advice was cautious, which is exactly what you would expect from a panel of doctors, nurses and pharmacists. But that's not what slowed the rollout: "advice" is simply guidance; politicians should consider it, but they don't have to act on it. ATAGI doesn't make any political decisions.

The fact is the dangers of COVID-19 have always been much larger than that of the AstraZeneca vaccine, which easily passes a cost-benefit test for all adults. Fewer lives lost from leaky hotel quarantine, no more lockdowns, and an earlier reopening of our borders against a 0.0005% risk of (treatable) blood clots? It's a no-brainer.

Blindly following the health "advice" and then blaming that for the disaster we find ourselves in today is a cop out. All of the actual decisions – and non-decisions – have come from the top, and that means the buck stops squarely with ScoMo.


The Wrap Up

  • 📦 Ex-Nissan boss Carlos Ghosn revealed how he escaped Japan in a box.
  • Incentives matter: A record number of French citizens booked vaccine shots after the government announced that starting in August, anyone who wants to visit cafes, bars or shopping centres must certify they've been vaccinated or recently tested negative for the coronavirus.
  • 🤑 US Senate Democrats reached an agreement for Biden's $US3.5 trillion 'human infrastructure' spending plan. They plan to get it approved with Budget reconciliation, which only requires a simple majority to pass.
  • 🦠 Indonesia yesterday surpassed India's daily COVID-19 case numbers, recording over 40,000 new cases for two straight days.
  • 🚢 A "cruise to nowhere" had to return to Singapore after a passenger was suspected of having contracted COVID-19, forcing nearly 3,000 passengers and crew to their cabins.
  • 💶 The European Central Bank (ECB) approved a multi-year (5+) project to create a digital version of the euro, a digital wallet that euro zone citizens can keep at the ECB.

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