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Safe and secure

Good morning! Always remember that you are "safe and secure", at least according to Finance Minister Simon Birmingham, who confirmed that "we won't be seeing borders flung open at the start of next year with great ease".

There's always a trade-off – and it seems the price we're going to pay for the botched vaccine rollout and persevering with a sub-optimal hotel quarantine system is no international travel for at least another year. Unless it's for a wedding, of course. Plenty more in today's Corona Wrap below.

Market Wrap

Daily % change

AUD/USD

77.8

0.5%

10Y Bond

1.65

-2.4%

ASX200

7,062

-0.5%

Brent (bbl)

68.3

-0.6%

Gold (oz)

1,816

1.6%

Iron ore (t)

195.0

4.4%

Bitcoin

55,986

-1.7%

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

Another record high for the US S&P500 last night, with the index closing up 0.82%. Stocks were boosted by an upbeat jobless claims report, which showed that the number of people filing new claims fell to its lowest since the pandemic struck (-92,000 to 498,000), with the great summer reopening well on track in the US. Non-farm payrolls data are due out tonight.

Addicted to debt: NAB reported March quarter cash earnings growth of 48.1% from the December quarter and a more than doubling of its half-year profit, with CEO Ross McEwan cautioning that: "Now is not the time to make big moves to get [the federal Budget] back into surplus". That's the thing about stimulus – it's addictive and now is never the right time to pull the plug, especially when you're the CEO of a bank directly benefiting from it. According to McEwan, NAB is "seeing a pipeline growing that we haven't seen for years and years and years. We've got more bankers being supported by more associates than we've had for probably decades". 💸

The M&A frenzy: When debt is cheap, so are your competitors. The AFR reported that the value of mergers and acquisitions where the target was an Australian company hit an all-time high of $50.5 billion through the first four months of 2021 (the data stretch back to 1980). Globally the sum of deals hit $US1.8 trillion, also a record high.

An iron balloon: The iron ore price breached a double ton yesterday for the first time since daily prices have been available. The catalyst behind the large upward movement was concerns – albeit remote – that China might try to hit Australia where it hurts (iron ore), following the abrupt termination of the China-Australia Strategic Economic Dialogue yesterday (see The Wrap below).

Note the price in the summary table above is the June futures contract price not the daily spot price, which is proprietary.


Corona Wrap

Pardon our French

Perhaps its time to ditch the hotels?
Perhaps its time to ditch the hotels? Johannes Leak/The Australian

The greater Sydney area still finds itself in a bit of strife, with new restrictions such as compulsory mask wearing indoors and limits on gatherings introduced while the government tries to trace down the missing link in Wednesday's new community COVID-19 case.

A missing link: Genome tracing revealed that the man in his 50s has the same strain of virus as a recent overseas case from the US, who is still in hotel quarantine. The US traveller tested positive on their first day in the Park Royal at Darling Harbour and was then moved to the Sydney Health Accommodation on 28 April.

Amateur sleuthing: Given that Wednesday's case was considered to be infectious from Friday 30 April, that means the virus probably escaped hotel quarantine almost as soon as the US traveller arrived, or while they were being moved between accommodations. It also means there's still a missing link – someone caught it from the US traveller (e.g. a fellow traveller near the end of their stay) and then infected Wednesday's case.

Pardon our French: Moving on to vaccines, Australia's rollout may be close to going completely tits up after two more people developed rare blood clots yesterday following their AstraZeneca jabs, a 66 year old in Queensland and a 70 year old in Tasmania. That makes it five new cases of clotting from the AstraZeneca vaccine in the past week, which could start to undermine the public's already frayed confidence in the vaccine.

The Wrap Up

Signal illuminates Facebook

Facebook collects a LOT of personalised data.
Facebook collects a LOT of personalised data. Gizmodo
  • Encrypted messenger Signal tried to buy a bunch of adverts on Instagram to show how much data Facebook collects on its users (see image above). Signal claims its ads were rejected and its account was disabled, while Facebook called it a "stunt". Amusing either way.
  • China's National Development and Reform Commission said the China-Australia Strategic Economic Dialogue, whatever that is, had been "indefinitely suspended... [due to] the current attitude of the Australian Commonwealth Government toward China-Australia cooperation". To be honest we're surprised – earlier in the day ScoMo appeared to endorse China's long-running policy on Taiwan unification: "We have always understood the 'one system, two countries' arrangement, and we will continue to follow our policies there ... 'one country, two systems', I should say." Whoops. 🤭
  • At least 30% of WA's quarantine hotel security guards have not even had their first COVID-19 vaccine dose. No wonder WA Premier McGowan has been so keen to reduce the state's international passenger load...
  • The Australian Competition and Consumer Commission (ACCC) said it will block an attempt by Qantas and Japan Airlines (JAL) to form a codeshare agreement, because it would "appear to undermine competition significantly by reducing the prospect of a strong return to competition on the Melbourne – Tokyo and Sydney – Tokyo routes".
  • US President Joe Biden said he plans to support a World Trade Organisation waiver for COVID-19 vaccine intellectual property rights.
  • Hong Kong pro-democracy activist Joshua Wong was sentenced to a further 10 months in prison for taking part in an annual Tiananmen Square vigil, which was banned in Hong Kong this year for the first time in 30 years.

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