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Good morning! ScoMo confirmed over the weekend that the government is now focused on getting "those customers" – ahem, "the students" – back into the country as "the next step" towards reopening Australia's borders.

He also said that vaccinated Australians would "be able to travel around Australia, particularly if there are states that are putting in place restrictions", as well as to countries with low rates of infection, although "an abridged or a different form of quarantine on their return" would still be a requirement.

At least we're making some progress, right?

Market Wrap

Daily % change

AUD/USD

77.7

0.5%

10Y Bond

1.75

-0.9%

ASX200

7,014

0.5%

Brent (bbl)

68.7

2.6%

Gold (oz)

1,838

0.6%

Iron ore (t)

202.2

-2.5%

Bitcoin

44,181

-10.3%

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

The US S&P500 rose 1.49% on Friday following public comments from a number of Federal Reserve members, including Loretta Mester (Cleveland Fed President), Richard Clarida (Fed Vice Chairman), Christopher Waller and Lael Brainard (Fed Governors), that Fed policy was in the "right place" and inflation pressures – which they consider to be "transitory" – won't cause them to change course.

Stimmy fade: US retail sales were unchanged in April, with the upwardly revised 10.7% rise in March proving to be a one-off (March is when most Americans received their $US1,400 stimmy payments).

Musk crashed crypto (again): Elon Musk responded to a tweet that said "Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings", with "Indeed", which promptly tanked prices for just about every cryptocurrency.  


Corona Wrap

Gummed up

The world still needs a lot more vaccine production capacity.
It's not too late to ramp up vaccine production capacity. The Economist

The Economist magazine ran a feature on COVID-19 vaccines over the weekend, with two articles summing up the current situation and offering ways to improve the outlook.

Scathing of Biden: US President Joe Biden recently broke rank and proposed waiving intellectual property claims on COVID-19 vaccines. The Economist believes that Biden's decision "is at best an empty gesture and at worst a cynical one", because:

  • there may be no vote until December, so it will do nothing in the short-term;
  • technology transfer would take six months to complete (and mRNA may take even longer);
  • vaccine makers aren't restricting their IP, agreeing to 214 technology-transfer agreements so far;
  • there is no evidence of price gouging; and
  • it may disrupt supply chains, waste resources and deter innovation.

Real solutions: According to The Economist, if Biden really wanted to help he would donate additional vaccines through COVAX rather than, for example, using them on teenagers in the US or stockpiling "boosters to cover the population many times over". He could also terminate the Defence Production Act (DPA), which has "gummed up" exports of key parts (e.g. filters), crippling vaccine production in countries such as India. Finally, he could work on "stimulating production all the way along the supply chain", through additional investment in "technology transfer and on the construction of new facilities around the world".


The Wrap Up

  • China's demographic problem isn't evenly distributed: "The share of people living in eastern China, where the economy performs better than the rest of the country, grew to nearly 40 per cent of the total population in 2020, up 2.15 percentage points from a decade earlier. The share of those living in central and northeast regions fell to 25.8 per cent and 7 per cent respectively." Here is an interesting take on the same issue from Andrew Batson.
  • Half of the seats on the first repatriation flight from India were left empty after passengers tested positive for COVID-19. However, there are questions as to the quality of the testing process implemented by Qantas (on behalf of the Australian government), with several passengers able to independently produce negative tests a day later.
  • Colonial Pipeline paid a $US5 million ransom to hackers to have their systems restored, a decision that "will only embolden other groups going forward".
  • China became the second nation to successfully land a rover on Mars, a six-wheeled robot called Zhurong.
  • Canada and the US have started preliminary talks on lifting controls along their shared border. The Canada:US border has been restricted for over a year.
  • This is stimulus we can get behind: "Finance experts Company Debt say drastic drinking [124 per pints per adult] would be the best way of saving struggling hospitality businesses and to protect pubs from facing closures as a result of lockdown."

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