Delivered on

Politics first, health second

Good morning! Speaking in Brisbane, ScoMo yesterday reiterated his stance that reopening Australia's borders would involve "a sliding sort of scale", with the government still "working on the next steps".

He name dropped Singapore – currently in a semi-lockdown until 13 June due to rising case numbers – as "being the next potential [travel bubble] country".

We have our own thoughts on the international border in the Corona Wrap below.

Market Wrap

Daily % change




10Y Bond






Brent (bbl)



Gold (oz)



Iron ore (t)






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

US markets were weaker overnight, with the S&P500 down 0.25% and the tech-heavy Nasdaq composite falling 0.38%. Last week the Nasdaq fell for its fourth straight week, its longest losing streak since August 2019, as inflation worries continue to cause some trepidation.

No retail rebound: China's retail sales increased 17.7% year-on-year in April (from a low, lockdown-affected base), much weaker than the 24.9% expected by analysts in a Reuters survey. However, industrial output (+9.8%) and fixed asset investment (+19.9%) were equal and better than expectations, respectively. Property also remained hot, with new home prices in 70 cities rising 0.48% last month from March (and an eight-month high of 4.8% year-on-year).

Stimulus flowing: China's crude steel output was an all-time high 97.85 million tonnes in April, up 4.1% from March. The stimulus is working but it's also aggravating long-running structural problems in China's economy, namely an over-reliance on the commodity-intensive secondary sector (and the growing inefficiencies it generates).

Price rises: Japan's wholesale prices for April – as indicated by its corporate goods price index – increased by 3.6% in April year-on-year, the biggest rise since September 2014 and well above expectations of 3.1% growth. Commodities were the primary culprit, with oil goods prices up 39.3% and non-ferrous metals prices up 35.2%.

Corona Wrap

Politics first, health second

You just have to know the right people.
You just have to know the right people. The Age

The West Australian newspaper ran an article yesterday claiming that: "WA's Chief Health Officer changed COVID rules specifically to allow union reps into aged care homes, despite families being banned, two days after a Labor powerbroker complained to the office of Health Minister Roger Cook."

Incentives matter: The government claims the change was to "provide clarity". However, assuming the claim is true, it makes perfect sense that the government would make an exception for union representatives but not relatives: unions have deep, established political ties, while families wanting to visit their elderly relatives are dispersed and lack organisation. It's much easier for the former to influence government policy, even if it might come at the expense of the public at large.

On that note: If you want to know when Australia's international borders are likely to reopen, look to the polls rather than the prevailing health advice. ScoMo has to call an election sometime between early August 2021 and 21 May 2022, which means he'll be even more focused on public opinion than usual. Right now closed borders are a winner, with a Newspoll yesterday revealing that "73% of voters support the Morrison government's approach and believe the international borders should remain closed until at least the middle of next year".

So closed they shall remain, at least until the election or public opinion turns as more people get vaccinated – whichever comes first.

The Wrap Up

  • NSW Premier Gladys Berejiklian said she would be OK with opening Australia's international borders once 80% of adults had been vaccinated, and she would "like to see that happen sooner rather than the middle of next year".
  • A series of leaks appear to have confirmed that Twitter will soon implement a $US2.99/month subscription option called 'Twitter Blue', which may include features such as an undo tweet button, ad-free news reading,  and place to save tweets ('collections').
  • Singapore's government is considering delaying the time between COVID-19 vaccine doses to 6 to 8 weeks (from the current 3 to 4 weeks) to better protect its population and speed up the vaccine rollout.
  • The current COVID-19 outbreak in Taiwan has been linked to staff at China Airlines and an airport quarantine hotel, with local media reporting a pilot visited a bar while potentially infectious. Taiwan's share market (Taiex) has fallen 12.6% since the start of May.
  • The US will send 13% of its vaccine supply – or around 80 million doses – overseas by the end of June, which to date is five times more doses than any other country has shared with the world. 75% of those doses will be the AstraZeneca vaccine, with Pfizer, Johnson & Johnson and Moderna making up the remaining 25%.