Darkest before the dawn
By Justin Pyvis – Delivered on 24 Aug 2021
Good morning! There's not much to report on the COVID-19 situation in Australia's two largest cities, with case numbers remaining stubbornly high yesterday – 818 in NSW and 71 in VIC.

NSW Premier Gladys Berejiklian confirmed what most suspected would be the case: schools will remain closed in September and "we will provide [more] information when it's available".

Across the ditch the Kiwi lockdown was extended until at least midnight on Friday after 35 new cases were reported, the highest daily total since April 2020. Local rag Newsroom suspects the breach may have happened at a busy CBD walkway right next to an "outdoor" (it has a roof!) hotel quarantine exercise area. The photos are pretty damning – how something like that was ever considered a good idea really boggles the mind. 🤯

Oh, and the government was warned about it a month ago. 🙉
Markets

Daily % change

 

AUD/USD

72.2

+1.0%

 

 

10Y Bond

1.10

+2.8%

 

 

ASX200

7,490

+0.4%

 

 

Brent (bbl)

68.6

+5.5%

 

 

Gold (oz)

1,807

+1.3%

 

 

Iron ore (t)

136.6

-1.7%

 

 

Bitcoin

49,277

+1.6%

 

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

The US S&P500 jumped 0.85% overnight after the US FDA finally gave its full approval to the Pfizer vaccine, 👏 with the price of oil also shooting up on recovery hopes. Full approval (as opposed to "emergency authorisation") is actually a big deal, because it gives US corporates a more solid legal footing in terms of vaccine mandates.

Locally, the ASX200 added 0.39% to snap its 5-session losing streak with strong gains in the tech and mining sectors (excluding iron ore).
Economy
Riding the stimmy wave: Real estate agency McGrath reported revenue growth of 34% in 2020-21 and is "well up" on that this year. Chief executive Eddie Law said "there's nothing to suggest at the moment that's going to wane significantly". There never is...

Inflation watch: Consumer prices in Singapore increased by 2.5% in July from a year ago, with so-called "core" inflation – which excludes private transport and accommodation – rising 1.0%. Core inflation is what the Monetary Authority of Singapore tracks, and the 0.2% monthly increase marked its fifth consecutive rise.

Crypto still climbing: The price of a bitcoin passed $US50,000 for the first time since mid-May. Starting this week, PayPal will let UK customers buy, hold and sell digital currencies.
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Feature
Darkest before the dawn
Feature image Classy guy that ScoMo, borrowing a line from a Batman villain. YouTube/Warner Bros
ScoMo gave an impassioned speech prior to Parliament yesterday (based on this statement), channelling his inner Harvey Dent (aka Two Face) as he doubled down on the country's reopening plan:
"Rising cases need not impact our plan to reopen, and reopen as soon we can. I know it seems pretty dark now, but it's always darkest before the dawn, and dawn's coming."
Stepping back: Late on Sunday WA Premier Mark McGowan said that when his state reaches an 80% vaccination rate, "lockdowns are [still] available as options". He has previously claimed that even at 80%, the "preferred position is that we don't have COVID". Similarly, Queensland deputy Premier Steven Miles said rising cases means "we may" close the border with NSW even after reaching 80%.

Yesterday's speech was essentially one of what will be many attempts by ScoMo to get the public onside ahead of a potentially messy battle with certain states.

Why this matters: It appears Australia's reopening plan may not have properly defined certain critical elements, such as the minimum hospitalisation rate needed to trigger lockdowns. Clearly Mark McGowan believes it's significantly lower than ScoMo – perhaps even zero. That's a problem, as it's not possible to reopen the country without the support of all states.

Looking forward: ScoMo has a small window in which to win people over ahead of the federal election, which is due before May 2022. Reopening euphoria is political gold – it's why Canadian Prime Minister Trudeau recently called an election nearly three years before it was required.

Expect the rhetoric to ramp up in the coming weeks as we approach 70% and then 80% of eligible individuals vaccinated (which is itself a moving target, with children to soon be included).
The Wrap Up
  • ✈️ Qantas is offering Australia-based passengers 1,000 points, 15 status credits or a $A20 voucher if they're fully vaccinated.
  • 🐱‍💻 A software engineer managed to forge Australia's COVID-19 digital vaccine certificate within 10 minutes.
  • 😢 No one will lose their job over this: several dogs were shot in a rural NSW council "to prevent volunteers... from travelling to pick up the animals".
  • 🏀 Former NBA star Andrew Bogut suggested politicians locking down their states should take pay cuts so that "at least we think you're in the ship with us... I think there'd be more compliance that way".
  • 🤔 Around 10,000 people per day in Victoria are cancelling existing AstraZeneca vaccine appointments, ahead of their Pfizer eligibility at the end of August.
  • 🏉 Super Rugby will return to its pre-COVID round robin format next year, with every Aussie and Kiwi team playing each other at least once.
  • 🌹 #Leadership. Kim Jong Un is currently on his 6th extended break from the public this year.
  • 💉 Data released by Israel's Health Ministry suggest a third "booster" shot of the Pfizer vaccine improves protection against serious illness by 5-6x in those aged over 60.
  • 🦠 Data from LA County show that as of 7 August unvaccinated adults aged 18-49 were 25x more likely to be hospitalised with COVID-19, with those aged 50+ nearly a dozen times more likely to be hospitalised and 17x more likely to die.
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