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New Zealand's reopening

Good morning! The situation in NSW just keeps getting worse, with the lockdown in Hunter and Upper Hunter extended for at least a week and several more local government areas now locked down. The state recorded 345 new cases yesterday, with just 116 known to be in isolation during their infectious period.

At her daily press conference, Premier Gladys Berejiklian said that "if we get advice to that [locking down the entire state], of course the New South Wales government will consider that".

Down in Melbourne there was talk of a third week of lockdown just hours after the initial lockdown was extended by a week, following no slowdown in daily case numbers – another 21 local cases yesterday, 6 of which were infectious in the community including a 'mystery case' in north Melbourne.

Finally, the ACT joined Australia's two largest states in misery, entering a 7-day lockdown at 5pm yesterday following the discovery of four new cases – the first for nearly a year. Exposure sites included a nightclub, pub, gym and church... 😒

Markets

Daily % change

 

AUD/USD

73.4

-0.5%

 

 

10Y Bond

1.22

+0.8%

 

 

ASX200

7,588

+0.1%

 

 

Brent (bbl)

71.2

-0.6%

 

 

Gold (oz)

1,755

+0.1%

 

 

Iron ore (t)

160.1

-2.1%

 

 

Bitcoin

44,521

-4.2%

 

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

The US S&P500 rose 0.30% to a another record high following a third straight decline in jobless claims, which fell to 375,000 last week. Continuing claims also fell to 2.866 million, the lowest since mid-March 2020.

Locally the ASX200 inched up 0.05% to set its sixth record high in the past seven days, with a notable performance from Telstra (+3.7%) after the telco announced a share buyback following its first increase in net profit for five years.

Inflation watch: Producer prices in Japan (the prices that factories charge wholesalers) spiked 1.1% in July, well above expectations of a 0.5% rise and nearly double June's 0.6% increase. The story was similar in the US, where monthly producer prices rose 1% in July, well above expectations of a 0.6% increase. On an annualised basis that means producer prices in both countries are running well over 10% per year – if they keep rising at that rate, it's only a matter of time before some of it is passed on to consumers.

Reopening recovery: The UK reported GDP growth of 4.8% in the June quarter. No prizes for guessing the big gainers – wholesale and retail trade, accommodation and food service activities, and education. The UK's economy is now just 4.4% smaller than its pre-coronavirus level, meaning it's on track to reach the Bank of England's forecast of a return to its pre-pandemic size in the final quarter of the year.


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Feature

New Zealand's reopening

NZ bubble cartoon.
New Zealand could be stuck in a bubble for quite some time. Mark O'Brien/Office of the Prime Minister’s Chief Science Advisor

Our friends across the ditch yesterday announced how they plan to reopen. Well, sort of. While an all-too familiar '4 step plan' was trotted out, it was long on objectives but light on details. Called Reconnecting New Zealanders to the World, Prime Minister Jacinda Ardern and her advisor Prof David Skegg confirmed:

  • first Pfizer vaccine doses will be available to all Kiwis from 1 September;
  • there will now be a six week gap between Pfizer dose (up from three) 👏;
  • the government will trial self-isolation for fully vaccinated travellers in October; and
  • quarantine-free travel will be introduced for fully vaccinated travellers from low risk countries (in the first quarter next year).

Breaking it down: In the short-term New Zealand will continue with its elimination approach. No figure was provided for what level of vaccination might be required for the reopening (presumably well above Australia's 70%). Nor did the plan include anything about vaccinating children aged 12 to 15 – currently the super-spreaders in other highly vaccinated countries – with the government waiting "until they have received expert advice on it".

In terms of travel and the new "individualised risk-based model", it's not actually ready and will apparently take the government "the remainder of 2021" to complete. 😴

Looking forward: The Kiwis appear to legitimately be 'in no hurry'. It was always going to be the case that they'd have less of a tolerance for 'living with' (endemic) COVID-19 than Australia, which may not have much of a choice considering the situation in NSW. But this "highly cautious" approach could mean New Zealand remains in its bubble deep into 2022, given the plan's lack of conviction ("keep our options open") and the fact that potentially super-spreading teenagers – the "expert advice" will no doubt take a long time to arrive – were left out entirely.


The Wrap Up

  • 💉 Australia's Fair Work Ombudsman updated its mandatory vaccination advice for employers, stating that while courts will decide on a case-by-case basis, it may be legal in many situations.
  • 🍯 No more Winnie the Pooh song in Chinese karaoke? "China to ban karaoke songs with 'illegal content' that endangers national unity."
  • 🌭 Incentives don't need to cost much – In Germany, "once officials decided to offer a free sausage with every jab, the [vaccination] centres were truly flooded with people".
  • 🐱‍💻 Hackers have so far returned almost half of the funds they stole from DeFi platform Poly Network, as "laundering them and cashing out is extremely difficult".
  • 🕵️‍♂️ Australia, surveillance state. "This comes with democratic costs – impacts on liberties such as freedom of expression and freedom of the press."
  • 📈 The New York Stock Exchange will require COVID-19 vaccination for everyone entering its trading floors from 13 September.
  • ⚽ Part of Lionel Messi's contract at PSG included an unspecified amount of 'crypto fan tokens', which give fans "a stake in minor decisions, without changing overall corporate structures".
  • 🤔 British Columbia's Centres for Disease Control updated its guidelines around COVID-19 and sex, suggesting residents "use barriers, like walls (e.g., glory holes), that allow for sexual contact but prevent close face-to-face contact".

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