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History repeats

Good morning! NSW Premier Gladys Berejiklian said she would make a decision by Thursday "at the latest" about the future of the state's lockdown, which is now in its third week.

Both the Commonwealth and NSW state governments announced new support packages for the embattled state yesterday, with a bolstered COVID-19 Disaster Payment available for companies and workers from this Friday, now with less bureaucracy – "You won't need to keep reapplying all the time", according to ScoMo.

All payroll tax liabilities will also be deferred for the next two months, and smaller businesses that can prove a reduction in turnover of at least 30% will have it waived entirely.

Sigh. Buckle up, folks. This could take a while.

Markets

Daily % change

AUD/USD

74.5

-0.4%

10Y Bond

1.38

+3.8%

ASX200

7,332

-0.0%

Brent (bbl)

76.4

+1.5%

Gold (oz)

1,808

+0.1%

Iron ore (t)

210.5

+1.2%

Bitcoin

32,413

-1.6%

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

US stocks were weaker overnight, with the S&P500 down 0.35% after the US consumer price index jumped 5.4% in June from a year ago, an acceleration on May's 5% and well above the 4.9% slowdown forecast by economists. Locally, the ASX200 was up as much as 0.7% in the morning on a strong US lead but gradually declined through the day to finish flat at -0.02%.

The price of power: Collapsed finance group Greensill Capital paid former UK Prime Minister David Cameron more than $US1 million for a 25-day per year advisory role. His job "included an attempt to secure government funds for the ailing company". Australia's former foreign minister Julie Bishop reportedly worked as a "senior adviser" to the company and personally approached the Morrison government on its behalf last year. According to the FT, she was paid more than $US600,000 per year.

America reopening: The price of lumber has fallen for 9 straight weeks, erasing its 2021 gains, as supply responds at the same time as people shift their spending from home improvement to hospitality and travel.

Plenty in the pipeline: New home sales in Australia were up 15.3% in the June quarter, below that experienced during the government's HomeBuilder stimulus programme but still up on pre-pandemic levels. Builders were given up to 12 months after the scheme ended to commence construction, with HIA Economist Angela Lillicrap saying that "there will be a significant number of new homes entering the pipeline post-HomeBuilder, which will ensure activity remains elevated into 2022".

Confidence slammed: The latest NAB business confidence survey, conducted between 18-30 June, showed that operating conditions deteriorated sharply, led by Victoria after Melbourne's 2-week lockdown. Interestingly, 7 in 10 firms said they still expected to pay their workers more in the coming six months after only half had given pay rises over the previous six.

Chinese supply: China's exports surged in June, rising 32.2% in US dollar terms from 2020 – well above a Bloomberg consensus forecast of 23% – as global lockdowns eased while demand for medical goods and work-from-home equipment remained strong.


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Feature

History repeats

Image from 23 September 2020 showing each nation's vaccine orders.
Australia had ordered a lot of vaccines by 23 Sep 2020 but didn't adequately diversify its supply. FT/Deutche Bank

Australia appears to be asleep at the wheel yet again, with Health Minister Greg Hunt saying that the government will wait for advice from medical experts before buying additional vaccine doses, all while "other countries are moving more quickly to cement bigger deals... for the years ahead".

Stepping back: The Australian government was too slow to sign a deal with an mRNA vaccine producer last year (Pfizer or Moderna) and when it did it was only for 10 million doses, effectively putting all of its eggs in two baskets – AstraZeneca and the failed University of Queensland candidate. The image above shows vaccine orders as at 23 September 2020, with every other wealthy nation significantly more diversified than Australia at the time.

Why this matters: Pfizer showed that a third dose of its standard vaccine improves people's resistance against COVID-19 variants, and earlier this week Israel began offering a third dose of the Pfizer vaccine to severely immunocompromised adults. While it's no certainty, there's a good chance that a third dose of a standard vaccine or a variant booster will be advisable at some point in the future. Given that an mRNA vaccine dose costs somewhere in the vicinity of $US15-20 – so around $A450 million for every Australian adult, or the equivalent to 3 days of Sydney being locked down – placing an order now really should be a no-brainer. Do it!

Alas, the government's non-decision to wait for its slow, secretive health advice before doing anything is just begging for history to repeat. To the back of the queue we go, again. It's all just so predictable.


The Wrap Up

  • 🍻 Starting this Saturday, South Perth's Windsor Hotel will give away a free pint to those who have had a COVID-19 vaccine dose. The promotion runs between 12pm-6pm daily but must be on the same day you get your jab.
  • 🐢 The World Health Organisation really needs a kick up the backside, after its chief scientist advised against mixing and matching COVID-19 vaccines, despite positive trial results.
  • 🏀 The Australian Boomers beat Team USA's NBA superstars 91-83 in a Tokyo Olympics warm-up game in Las Vegas, just their second-ever win over Team USA.
  • 🐱‍💻 SolarWinds was hacked again, with an unknown group exploiting a flaw in two of its programs to go after "a limited, targeted set of customers".
  • 🔥 The crisis in Cuba is showing no signs of abating, with people revolting against the Communist dictatorship as COVID-19 cases soar along with growing inflation, blackouts, and shortages of food, medicine and basic products.
  • 🦗 Australia's T20 cricket team lost a third match in a row to the West Indies, securing the home side a series victory with two matches still to play.
  • 🥐 France claimed a 28-26 victory over the Wallabies in Melbourne, their first win in Australia in 31 years.
  • 💉 The US Food and Drug Administration put a warning label on the Johnson & Johnson vaccine, noting an increased risk of a rare neurological disorder – Guillain-Barré syndrome – in the six weeks after inoculation.
  • 🎗️ Australia will donate 1.5 million surplus doses of the AstraZeneca COVID-19 vaccine and $A40 million in cash to help Vietnam procure vaccines.

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