Delivered on

Peak Delta?

Good morning! There's still no end in sight for New South Wales, with new cases remaining stubbornly in the hundreds and nearly half of those infected still in the community for all or part of their infectious period. Premier Gladys Berejiklian said she "won't be able to announce anything until closer to 28 August, because the case numbers are anyone's guess and we don't know yet – and I have to be honest about this – whether we're through the worst of it or not".

Elsewhere, ScoMo released the all-important Doherty Institute research that underpinned the 70-80% Freedom Zone, with the analysis confirming what everyone has known for over a year – "it's really the 20-39 years that are peak spreaders. They will bring COVID to their children and to their parents... As supply allows, extending eligibility to all adults (16+) offers the greatest potential to slow down transmission".

Just open it up to all, regardless of whether or not an individual is currently in a hotspot. Even vaccinating at random would likely prevent more infections per vaccination than the government's current descending age strategy.

Markets

Daily % change

 

AUD/USD

74.0

+0.5%

 

 

10Y Bond

1.16

+1.8%

 

 

ASX200

7,475

-0.2%

 

 

Brent (bbl)

72.4

-5.1%

 

 

Gold (oz)

1,813

+0.1%

 

 

Iron ore (t)

179.0

+0.9%

 

 

Bitcoin

38,047

-1.9%

 

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

The US S&P500 finished up 0.82% after more positive earnings reports – 88% of them have now beaten Wall Street estimates – and strong US factory orders, which rose 1.5% in June, well above expectations of a 1% gain. Locally, the ASX200 slipped 0.23% with soaring tech stocks such as buy now, pay later players such as Afterpay and Zip Co not able to offset declines in the banking, energy and materials sectors.

Stimmy flows: The value of Australia's new housing loan commitments eased ever so slightly in June, dropping 1.6% from May but remains 82.6% higher than this time last year and 91% higher than June 2019. Building approvals also fell a large 6.7% following the end of the government's HomeBuilder stimulus programme, which inevitably pulled forward demand.

Inflation watch: Consumer prices in Korea rose 2.6% in July, matching the fastest pace of gains this year and remaining above the central bank's 2% target for the fourth straight month.

No QE3: The RBA left the cash rate unchanged and will maintain its existing plan to continue purchasing government bonds at a rate of $A5 billion a week, before reducing purchases to $A4 billion a week in early September. It noted that the "economic recovery in Australia has been stronger than was earlier expected", although it still plans to maintain "highly accommodative monetary conditions" until 2024.

Spiritual opium: The share prices of Chinese gaming companies tanked yesterday (e.g. Tencent -10.57%) as investors worried about Xi Jinping's hammer 🔨 whacking that sector next, following a state media report that compared video gaming to "spiritual opium", blaming it for near-sightedness, academic performance and the development of personality disorders.


Thanks for reading Brekky Wrap.
Forwarded this issue? Click here to subscribe.


Feature

Peak Delta?

The most recent wave of COVID-19 cases has already started to decline in some European nations, despite relaxed restrictions – e.g. the UK's 'Freedom Day' on 19 July – and the rise of the Delta strain. Most importantly, hospitalisations remain well below where they were during all prior waves.

Six charts showing COVID cases and hospitalisations in Europe.
We've adjusted the scale to match each country's peak in cases/hospitalisations. OurWorldInData.org

Digging deeper: The most obvious explanation is that vaccines work at preventing severe illness. All of the countries charted above have a full vaccination rate over 50%, equating to >65% of adults. However, it's not the only explanation – it's summer, so people are outdoors which naturally reduces transmission. School is out, so students are not being tested (only mandatory when schools are open). There could also be some who simply started voluntarily socially distancing once case numbers hit a certain threshold.

But none of those, other than effective vaccines, can explain the fact that only in Spain have hospitalisations reached even 20% of their peak despite soaring cases in many countries. Now that's not to say they won't – the real test will be when the autumn cool kicks in, schools return and people increasingly interact indoors.

Why this matters: As has been the case throughout the pandemic, Australia has a several month head start in terms of adapting policy to the virus. While our vaccination rollout has been abysmal, when we eventually get through winter and approach The Freedom Zone of 70-80% of adults fully vaccinated, we should know exactly what to expect – Europe will have already done it!


Tokyo 2020 🗼

There were no medals of any colour for Australia yesterday but the Boomers cruised into the basketball semi finals with a 97-59 win over Argentina, setting up a thrilling match against the #1 ranked Team USA. It was also good news for the Kookaburras, who will play Belgium for their first gold medal since 2004 after accounting for Germany 3-1 in the semi.

Australia should also pick up gold in the men's 470 sailing today, with the duo of Mat Belcher and Will Ryan holding an unassailable 20-point lead over Sweden in the final – they just need to avoid being disqualified!

Elsewhere, the International Olympic Committee is investigating two Chinese gold medallists who wore badges featuring Mao Zedong during a medal ceremony, which may have breached the rules on political paraphernalia.

Medal tally

🥇

🥈

🥉

1 🇨🇳 China

32

21

16

2 🇺🇸 United States

24

28

21

3 🇯🇵 Japan

19

6

11

4 🇦🇺 Australia

14

4

15

5 🇷🇺 ROC

13

21

18


The Wrap Up

  • ✈️ Qantas will stand down 2,500 workers for two months, with chief executive Alan Joyce remarking that "it's reasonable to assume that Sydney's borders will be closed for at least another two months".
  • 💸 Opposition leader Anthony Albanese has been pushing the government to offer a retrospective vaccine incentive of $A300 per adult, at a cost of up to $A6 billion.
  • 💉 The ACT and Tasmania opened Pfizer vaccination appointments to anyone aged over 30. WA will also offer Pfizer doses to those aged over 30 but only during during a two-week "blitz" starting 16 August. You can sign up here.
  • 🦘 Lockdowns on the east coast and a beer festival in Wellington have forced the Wallabies into playing two tests in a row against the All Blacks this month, both at Eden Park where New Zealand have won 20 straight against Australia.
  • 🚫 According to the US CDC, more than 99.99% of people fully vaccinated against COVID-19 have not had a breakthrough case resulting in hospitalisation or death.
  • 💍 Amazon's Lord of the Rings TV series will premiere on 2 September 2022.
  • 😔 All deputy constables in New Orleans will be required to get vaccinated "ahead of heavy eviction workload", following the expiration of the US federal eviction moratorium.
  • 🐱‍💻 French intelligence confirmed that Israeli 'Pegasus' spyware was found on the phones of at least three French journalists.
  • ⛽ Boris Johnson's climate spokesperson drives an old diesel-fuelled car that she bought "third-hand".
  • 📜 Referring to cryptocurrency regulation, the new US Securities and Exchange Commission chief said "it's only with bringing things inside - and sort of clearly within our public policy goals - that a technology has a chance of broader adoption".
  • 🛂 New York will become the first major US city to require proof of COVID-19 vaccination to dine indoors at a restaurant, see an indoor performance or go to the gym.

Peak Delta? was brought to you by Justin Pyvis. Forwarded this issue? Click here to subscribe.