It's testing time
By Justin Pyvis – Delivered on 29 Sep 2021

Good morning! An indoor mask mandate was applied in the Brisbane city and Moreton Bay council areas for two weeks following three separate cases of local transmission in Queensland:

a worker at an aviation training facility;
a person who tested positive five days after leaving hotel quarantine; and
of most concern, a truck driver who was infectious in the community for eight days who across three different locations.

According to the state's Chief Health Officer Jeannette Young, additional restrictions will be implemented depending on "what happens over the next 24 to 48 hours". She added that no decision will be made on the NRL Grand Final (Sunday) or Rugby Championship fixtures (Saturday) until the actual day of the events. 🤞

Elsewhere, Victoria (867) officially overtook New South Wales (863) in daily case numbers for the first time this outbreak. While restrictions will still ease slightly following the 80% first dose milestone, it's going to be hard to take advantage of boating, tennis or golf given Melbourne's about to get walloped with thunderstorms and 20-35 millimetres of rain over the next two days.

Poor Victorians. 😔

Fully vaccinated population (aged over 16)

ACT
NSW
TAS
NT
SA
VIC
QLD
WA
Markets

Daily % change

AUD/USD

72.4

-0.7%

10Y Bond

1.48

+2.1%

ASX200

7,276

-1.5%

Brent (bbl)

78.6

-1.0%

Gold (oz)

1,733

-1.0%

Iron ore (t)

112.9

-5.4%

Bitcoin

41,801

-2.6%

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

The US S&P500 collapsed 2.04% as the yields on US 10-year treasuries rose again to 1.56%, the highest since June, taking the wind out of tech stocks.

The world's worst forecaster, Federal Reserve Chair Jerome Powell, also spooked markets when he told Congress that inflation has been "larger and longer lasting than anticipated", but that "if sustained higher inflation were to become a serious concern, we would certainly respond and use our tools to ensure that inflation runs at levels that are consistent with our goals".

Locally, the ASX200 plunged 1.47% despite a soaring energy sector (+4.34%) as oil prices continue to set records, with everything else weaker except for utilities (+0.74%). Iron ore again showcased its volatility, dropping over 5% only a day after gaining over 7%.

Economy

Retail pain continues: Retail sales in Australia declined for a third straight month in August, falling 1.7% due to "lockdown restrictions, with each of the eastern mainland states experiencing falls in line with their respective level of restrictions".

Stagflation watch: The weekly ANZ-Roy Morgan Consumer Confidence survey showed a third straight improvement last week "as Australians focused on domestic issues in recent weeks", namely the reopening plans in Victoria and New South Wales. However, "a more striking development this week is the rise in weekly inflation expectations to 4.8%... High inflation expectations at a time of weak wage growth could drag on overall consumer confidence if people start to worry about the cost of living".

Deflating: Referencing Australia's growing levels of household debt, Treasurer Josh Frydenberg warned that "Carefully targeted and timely adjustments are sometimes necessary", revealing he had discussed cooling measures with the Council of Financial Regulators (APRA, ASIC, the RBA and Treasury).

Quadversification: After meeting with the "Quad" (Australia, the US, India and Japan), ScoMo announced a $A2 billion taxpayer-guaranteed loan facility for "critical minerals projects" such as rare earths, which are used in various high tech products, electric cars and wind turbines. Another not-so-subtle jab at China, which produced 85% of the world's rare earths refined products in 2020.

Burning hot: The S&P CoreLogic Case-Shiller national home price index increased for the fourth straight month in July, rising to a new record 19.7%, up from the previous record of 18.7% set in June. That's now fourteenth consecutive months of accelerating prices.

Downbeat: The US Conference Board's consumer confidence survey fell to a seven-month low in September due to rising COVID-19 cases and "deepened concerns about the economy's near-term prospects".

Backdoor bailout: China's government has reportedly started 'asking' state-owned firms "to purchase some of embattled China Evergrande Group's assets", which it hopes "will ward off or at least mitigate any social unrest that could occur if Evergrande were to suffer a messy collapse".

Feature
It's testing time

Australia's Therapeutic Goods Administration (TGA) finally approved at-home rapid antigen tests for use from 1 November, which will play an important part in keeping COVID-19 under control when the country reopens.

Breaking it down: Rapid antigen tests, unlike the polymerase chain reaction (or PCR) tests we're familiar with here in Australia, are cheap (less than a dollar per test in Europe), can be administered at home and produce a COVID-19 result within 20 minutes. However, there is a downside – the test is slightly less accurate than a PCR test at picking up infections in asymptomatic cases or those with a low viral load (although those people aren't very likely to be getting a PCR test to begin with!).

Why this matters: These tests are used widely in Europe and North America, providing people and workplaces where staff are routinely tested a less invasive method of nipping a COVID-19 infection in the bud before it can be spread again. Have the sniffles, a sore throat or are exposed to a person with COVID-19? Take a rapid antigen test. If the test comes back negative and you have no known exposure, you're in the clear. Positive? Self-isolate or confirm it with a PCR test if you believe you have a low likelihood of infection.

Looking forward: It will be up to individual states to come up with rules as to how these tests are used. According to Health Minister Greg Hunt, "The early guidance we have is that the expectation would be that if someone is positive they do confirm that with a PCR test."

That's probably how it will go, as "despite the high specificity of antigen tests, false positive results will occur, especially when used in communities where the prevalence of infection is low". But whatever the states settle on, rapid testing will form an integral part of the toolkit in keeping the COVID-19 reproduction rate as low as possible.

One step closer to reopening! 🙏

The Wrap Up
✈️An announcement about international travel may be "imminent", with a report claiming ScoMo will allow states that reach the 80% double dose milestone to ditch hotel quarantine in favour of a 7-days of home isolation. WA and QLD will be "locked out" unless they reopen state borders first.
🦅Paleontologists in South Australia discovered the fossil of a 25-million-year-old eagle that they believe preyed on koalas.
😔Vaccination rates amongst indigineous Australians are the lowest in the country at just 45.9% first-dose and 29.1% fully vaccinated, well below the 76% first-dose and 52% fully vaccinated nationally.
☢️The latest Guardian Essential poll found that "62% believed Australia was correct to pursue the nuclear submarine deal with the US and the UK".
💂The British government put "the military on standby as part of further measures to address a supply chain crisis that has led fuel pumps to run dry amid panic-buying by motorists".
🚀North Korea fired off another short-range missile "just as the North's ambassador to the United Nations called on the United States to end joint military exercises and withdraw its strategic weapons from around the Korean Peninsula".
🍁A newly released Canadian Forces report found that Canadian military commanders used the pandemic to test propaganda techniques on Canadians without approval from higher authorities.
🕵️‍♀️The US government will spend $US1.9 billion to reimburse telecom carriers for removing network equipment made by "national security threats" such as Huawei.
💉Australia's Fair Work Commission ruled that a fired aged care staff member who refused a flu vaccine was not unfairly dismissed, a potentially precedent-setting ruling for COVID-19 vaccine mandates.
🏖️The founder of Dropbox believes the 40-hour workweek – "an artefact of factory work" – will die out, as "the workplace will now be wherever work happens, and the workweek will be whenever work happens best for each person".
If you were forwarded this Wrap, why not sign up for yourself - it's free!