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Hotel quarantine gets leakier

Good morning! Queensland reported a potentially serious quarantine leak yesterday, a man who upon completing his hotel stay became sick and was infectious in the community for 5 days. Authorities revealed that he stayed at a Brisbane backpackers over that period, with Queensland chief health officer Jeanette Young saying "the backpackers... could have gone anywhere in the state". 😬

We also got the full details of the lockdown extension in New South Wales, with Gladys Berejiklian confirming it'll continue for at least another 4 weeks but some activities, such as construction, will be allowed to resume outside of eight 'hotspot' LGAs. You can view the full media release here.

Markets

Daily % change

 

AUD/USD

73.7

+0.1%

 

 

10Y Bond

1.16

-1.7%

 

 

ASX200

7,379

-0.7%

 

 

Brent (bbl)

74.7

0.0%

 

 

Gold (oz)

1,807

+0.4%

 

 

Iron ore (t)

199.2

+1.4%

 

 

Bitcoin

40,086

+5.5%

 

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

The big news overnight was the release of the US Federal Reserve minutes, with the official statement revealing an upgraded view of the economy along with an assurance that monthly purchases of $US120 billion in bonds will continue until there is "substantial further progress" toward the Fed's inflation and employment goals. The S&P500 interpreted those comments as doveish and rallied late in the day, although still finished down 0.02%. A reminder that this is how the Fed generally operates – too slow, then too fast. Watch those asset prices. 🔥📈📉

Back to normal: The IMF expects the global economy to grow 6.0% in 2021 and 4.9% in 2022, unchanged from its forecast back in April, with inflation to "return to its pre-pandemic ranges in most countries in 2022... though uncertainty remains high". In terms of Australia it was quite bullish, raising its growth forecast from 4.5% growth in 2021 to 5.3%, and from 2.8% to 3% in 2022. Being a big bureaucracy with many layers of management, the IMF finalised these numbers way back in June – well before over half of Australia's population was most recently plunged into lockdown – so take them with an extra large pinch of salt.

Rising prices: Australia's consumer price index increased by 0.8% in the June quarter, which is an annualised rate of 3.2% – above the RBA's 2-3% target band. However, it's unlikely to phase the central bank given that it has on multiple occasions stated it expects some "transitory" inflation this year, and the recent lockdowns will likely reduce the rise in the September quarter.

Peak mining boom?: Australia's big mining companies are starting to open their chequebooks, with BHP challenging Fortescue for control of Canadian nickel miner Noront Resources by offering a 70% premium to its market price (and 130% more than the price in May). Meanwhile, Rio Tinto has committed $US2.4 billion to develop the Jadar Serbian lithium mine, hoping that will be sufficient to convince the government of Serbia to approve it given considerable local opposition.


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Feature

Hotel quarantine gets leakier

Australia's 38th hotel quarantine breach in a little under 70 weeks was confirmed yesterday, which is pretty close to what you would expect from a system that is 99.99% effective with roughly 6,500 international arrivals into Australia every week (excluding Howard Springs).

Chart showing hotel quarantine breaches in Australia by state.
The Delta strain is further undermining hotel quarantine's effectiveness. Covidlive.com.au

However, over the past two months that effectiveness has dropped to around 99.95%, given the recent rise in monthly quarantine leaks despite the fact that international arrivals were more than halved to 3,000 per week.

Why this matters: A small 0.17 percentage point decline in quarantine effectiveness might not seem like much but it really is, given the compounding power of exponents – it means the chance of a hotel quarantine leak in a given week has risen from 47.8% to 77.7%. That's a problem, given only 13.5% of Australians (~17% of adults) are fully vaccinated and we're still a couple of months away from having enough Pfizer doses to be able to offer it to everyone.


Tokyo 2020 🗼

There was a bit of a gold rush yesterday, with Australia equalling its best ever daily medal haul (3 gold, 4 bronze). The golds came courtesy of wins in both the men and women's coxless four rowing events, along with Ariarne Titmus taking out her second gold medal of the games in the women's 200m freestyle. 👏

Unfortunately the Olyroos couldn't maintain their early tournament form, unexpectedly going down 2-0 to Egypt and crashing out of the Olympics.

Medal tally

🥇

🥈

🥉

1 🇯🇵 Japan

13

4

5

2 🇨🇳 China

12

6

9

3 🇺🇸 United States

11

11

9

4 🇷🇺 ROC

7

10

6

5 🇦🇺 Australia

6

1

9


The Wrap Up

  • 🤦‍♂️ It's 18 months into a pandemic and Australia's government is only now "considering" using 99% accurate rapid antigen tests for frontline workers.
  • ↪️ New South Wales will divert Pfizer doses from the regions to vaccinate year 12 students from "high risk" local government areas, with all final year students returning to classrooms in around a fortnight.
  • 🚙 Today's American trucks and SUVs are so large "they now rival the size of the tanks American auto makers once helped build to win World War II".
  • ❌ Julian Assange was stripped of his Ecuadorian citizenship.
  • 😲 The city of Los Angeles is spending up to $US746,000 per unit to provide housing for the homeless, with an average cost of $US531,000 per unit.
  • 🔌 Several US states banned powerful gaming computers "due to new power consumption regulations". The regulations aren't dynamic, so "as components presumably become even more power-hungry, more potential builds could be taken off the table".
  • 💉 Pfizer released data showing a third jab 6 months after the second can boost antibodies "greater than fivefold". A word of caution – the study included just 23 people and has not yet been peer-reviewed or published.
  • 😷 The US Centers for Disease Control and Prevention pulled an ATAGI and reversed its position on masks, now advising even fully vaccinated people to wear them indoors. The US House and White House both immediately made masks mandatory.

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