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It's not so bad down under

Good morning! The Economist Magazine released its latest global liveability index yesterday, with four of its top ten cities located in Australia. Plenty more on that below but we first have to report some good news: Melbourne's two-week lockdown will end on Friday morning, with only the usual suite of restrictions (e.g. masks, capacity, distancing) to remain in place.

Unfortunately during the lockdown the virus may have spread to New South Wales and Queensland, courtesy of a couple who escaped Melbourne for a leisurely drive up to the Sunshine Coast (via four days in country NSW), where one of them subsequently returned a positive COVID-19 test result...


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The US S&P500 fell 0.18% last night, having at one stage flirted with a record high. Inflation data are due out tonight, which could have a large impact on prices depending on what is revealed. 10-year US Treasury yields fell below 1.5% "after solid demand at the government's 10-year note auction". Reminder: bond markets have never actually predicted future inflation.

Consumers not-so-confident: The Westpac consumer sentiment report for June fell 5.2% from May and is now down 9.7% over the last two months. The June survey incorporates the Melbourne lockdown (confidence in Victoria fell 7.5%) but the sub-components are also flashing some warning lights. According to Westpac, "Housing-related sentiment continues to show significant signs of stress", with the 'time to buy a dwelling' index recording "its fifth monthly decline in a row, dropping 7.1% in June".

Chinaflation: China's producer prices (the prices that factories charge wholesalers) hit a 13-year high 9% year-on-year in May, above market expectations. Consumer prices remain contained, rising 1.3% from 0.9% growth in April, well below the government's 2021 target of 3%.

Bitcoin buoyed: Prices rallied nearly 10% after El Salvador's Congress voted in favour of adopting Bitcoin as legal tender alongside the US dollar. To avoid exposing people to large exchange rate volatility, the government is guaranteeing convertibility to US dollars at the time of transaction.


It's not so bad down under

Adelaide, Perth, Melbourne and Brisbane all cracked the global top 10.
The best performers combined generous freedoms with few severe cases of COVID-19. The Economist

The Economist magazine released its 2021 global liveability index yesterday, with 6 out of the top 10 cities located in Australia and New Zealand. The index rates living conditions in 140 cities based on more than 30 factors, which now includes how a city handled COVID-19.

Not all is well: According to the Economist, "in the vast majority of cities... living conditions have plummeted compared with pre-pandemic levels", largely due to COVID-19 deaths and lockdowns. Most cities in Europe declined, with 2019's winner Vienna falling to 12th this year. Prague (-13.5 points), London and Frankfurt (tied at -13.2) were the hardest hit European cities.

COVID-free, live free: Auckland did the inverse of Vienna, moving from 12th in 2019 to 1st in 2021, thanks to an "early containment of the pandemic and to its subsequent ability to lift restrictions on mobility". Wellington – New Zealand's capital and third largest city – moved up for the same reasons, from a lowly 25th in 2019 to the top 5 this year. Melbourne (from 2nd to 8th) and Sydney (from 3rd to 11th) were the only Australian cities to fall, with big upward movements for Perth, Adelaide and Brisbane.

Looking forward: Australia ranks 79th in the world in terms of COVID-19 vaccine doses administered. There's a good chance that many cities that compete with Australia on this index will be completely open well before Australia's international borders, which could see us slide down the rankings in 2022.

The Wrap Up

  • PayPal is launching a credit card in Australia, "despite sharp declines in balances amid an onslaught from buy now, pay later".
  • Is Australia in a productivity crisis? The federal government's intergenerational report – due later this month – will use a 30-year average productivity growth rate of 1.5%, a figure well above the average of the last 10 years.
  • Nathan Buckley has resigned as Collingwood coach after nearly a decade in the role. His contract was due to expire at the end of the season and was not going to be renewed.
  • The US Senate approved an "emergency allotment" of $US50 billion for semiconductor production and the development of artificial intelligence, as part of a $US250 billion manufacturing support package.
  • The number of new semiconductor company registrations in China tripled between January to May. At least we can look forward to free riding on some cheap tech courtesy of US and Chinese semiconductor subsidies.
  • Yesterday's Fastly-related website outage was apparently triggered when one of its customers changed their settings. That's not a typo: one customer changed a setting and it took down websites such as Amazon, Reddit, the Guardian and the New York Times.
  • The ATO released its aggregated data for 2018-19, showing that the average taxable income was $62,549, up from $61,217 in 2017-18. The median taxable income – i.e. the midpoint – was just $47,492.
  • New South Wales annihilated Queensland 50-6 in the first State of Origin match last night.