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Pandemic lows

Good morning! Australia's drug regulator the Therapeutic Goods Administration granted provisional approval to Moderna's mRNA vaccine yesterday for individuals aged over 18 years, with the first million doses due to arrive mid-September. 🥳

Elsewhere, the Queensland government confirmed via genomic testing that the COVID-positive taxi driver in Cairns caught it from a fully vaccinated marine pilot who was picked up last week. It's cases like these that make it unlikely we'll see restrictions eased in any meaningful way for fully vaccinated Australians, at least until everyone has had the opportunity to get vaccinated later this year.

Further south there was some good news after regional Victoria was released from lockdown at midnight last night, reverting to the still very restrictive measures (e.g. no gatherings) that were in place last Thursday. Unfortunately regional NSW was not so lucky, with Tamworth and Northern Rivers (including Byron Bay) plunged into lockdown.

That means it's just Cairns, Greater Sydney (at least 64 new cases infectious in the community), Tamworth, Northern Rivers and Melbourne (11 new cases infectious in the community) remaining in lockdown...

Markets

Daily % change

 

AUD/USD

73.3

-0.9%

 

 

10Y Bond

1.23

+0.8%

 

 

ASX200

7,538

0.0%

 

 

Brent (bbl)

69.3

-1.4%

 

 

Gold (oz)

1,732

-1.5%

 

 

Iron ore (t)

160.6

-4.3%

 

 

Bitcoin

45,920

+4.4%

 

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

The US S&P500 fell 0.09% last night as concerns grew about the reopening recovery with a number of Asian nations, including China, implementing restrictions following outbreaks of the Delta variant. The price of Brent crude oil fell another 1.4% for the same reason, bringing the total decline since the late-July high of $US76/barrel to nearly 10%. Locally, the ASX200 was unchanged from Friday's record high.

Chinaflation: China's producer price index (PPI), which reflects the prices that factories charge wholesalers for their products, increased by 9% in July, which was above expectations "as commodity prices remained high despite the government’s steps to rein in costs". However, it hasn't yet flowed through to consumer prices which increased by 1% (although that was also above expectations of a 0.8% rise).

The economic cost of lockdowns: Treasury modelling suggests locking down greater metropolitan Perth costs the WA economy about $A25 million per day. That compares to estimates of $A100m per day in Melbourne and $A150-257 million in Greater Sydney.

This will end well: What could possibly go wrong? "The NSW government will borrow more than $A10 billion to inject money into a fund buying stocks and other global financial market assets, in an under-the-radar budget strategy that public finance and credit analysts warn will put taxpayer money at risk."

A hotter future: The Intergovernmental Panel on Climate Change released its latest report, which concluded that under all scenarios, temperatures will reach 1.5C above 1850-1900 levels by 2040 and that human influence is "very likely" (90%) the main driver of glacial retreat since the 1990s. Here's a full summary from the BBC.


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Feature

Pandemic lows

The latest Newspoll showed that public support for ScoMo's handling of the pandemic has fallen to new pandemic lows, dipping below 50% for the first time since the crisis began.

Chart showing ScoMo's declining approval ratings.
ScoMo will be hoping for a V-shaped recovery this year. The Australian

By the numbers: The government is now facing its worst electoral position since the Black Summer fires, with Labor leading 53-47 in the the two-party-preferred split. ScoMo remains preferred Prime Minister at 49% with opposition leader Anthony Albanese at 36%, but the gap between the two is now the smallest since the last election.

Why this matters: A federal election has to be held by 21 May 2022 and given that half of the country's population is currently isolating at home, there is only one issue on people's minds right now and it's not a good one for ScoMo – the pandemic! These numbers suggest we're unlikely to see an early election called, with ScoMo no doubt betting that an improving vaccine rollout and the end of lockdowns will see his party over the line next year.

Looking forward: The vaccine rollout and thus ScoMo's approval rating will receive a shot in the arm (sorry, we couldn't help ourselves) in about a month's time, with over a million doses of the Moderna vaccine due to arrive in September. That will coincide with a ramp-up of Pfizer deliveries, which should mean every Australian aged over 16 will have had an opportunity to have at least a first dose by sometime in October.


The Wrap Up

  • 😷 Tesla now requires workers at its Nevada battery factory to wear a mask indoors, even if they're fully vaccinated.
  • 🍔 Only in America Russia – "A woman from Omsk, Russia, is reportedly suing McDonald's over an advert featuring cheeseburgers and chicken nuggets, which she said caused her to break her fast during Lent."
  • 🤖 A barrier-free cafe where robots remotely controlled by people with severe disabilities deliver drinks and chat with customers will soon open in Tokyo, with the aim to "eliminate loneliness".
  • 🔬 A new paper concludes that "trust in science... makes people vulnerable to pseudoscience". A better approach is to remind people to engage in "critical evaluation".
  • ⚽ Lionel Messi will join French giants Paris Saint-Germain (which has Qatari owners) on a two-year deal thought to be in the region of $A47 million-a-year, after tax.
  • 🗳️ Former Queensland Premier Campbell Newman defected from the Liberal National Party, announcing that he will run for the Queensland Senate on the Liberal Democrats' (libertarian) ticket.
  • 🏛️ NAB agreed to purchase Citigroup's Australian consumer business for the price of the net assets plus $A250 million cash.
  • 🦗 Australia was bowled out for its lowest ever T20 score of 62 in a 60-run loss and series defeat to Bangladesh.
  • 🥝 On Thursday New Zealand's government will outline a six-month plan for public health and border reopening.