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The damage is done

Good morning! Last night ScoMo outlined his "first goal" – not a target, he's over those – to getting Australia's borders open again. A requirement to be vaccinated is a certainty but you'll need a good reason to leave, at least initially – e.g. "medical reasons, friends and family, important events, funerals, so on". Quarantine upon return will be required but it'll be in the form of home isolation, freeing up the hotel system.

Market Wrap

Rent seeking 101

Daily % change

AUD/USD

77.5

0.4%

10Y Bond

1.68

-1.7%

ASX200

7,059

0.5%

Brent (bbl)

66.8

0.4%

Gold (oz)

1,764

1.6%

Iron ore (t)

172.0

3.3%

Bitcoin

63,366

1.6%

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

The US S&P500 surged 1.11% following strong weekly jobless claims (-25%) and retail sales (+9.8% in March) data.

Local markets were also spurred on by positive data, namely the March employment numbers (see below), sending the ASX200 up another 0.51% and bringing it to within 1.1% of its all-time high set on 21 Feb 2020.

Jobs watch: Australia's unemployment rate fell to 5.6% in March (from 5.8%), with 70,700 jobs added. It was the sixth consecutive monthly increase in employment. Next month is the biggie – the survey period for March still included the distortionary effects of JobKeeper.

Flying high: Qantas expects to have restored 90% of its domestic capacity by the middle of this year, up from a previous forecast of 80%. Virgin is leasing 10 new jets to get back to 80% of its pre-COVID domestic capacity by mid-June. However, "thousands of [Qantas'] international crew remain stood down waiting for the border to reopen".

Rent seeking 101: Commonwealth Bank CEO Matt Comyn told the house economics committee that Australia's regulators are currently skewed too far towards innovation. You read that right – he thinks we have too much financial innovation in this country! How dare the buy now, pay later companies such as Afterpay encroach on CBA's monopoly rents! Comyn's solution is as you might expect: suffocate the competition with more regulation.


Travel Wrap

Why the Olympics is at risk (again)

The Tokyo Olympics aren't looking very likely.
The Tokyo Olympics aren't looking very likely. Post Bulletin

A senior Japanese politician revealed that Japan's government is still considering cancelling the Tokyo Olympics, if "it is said to be impossible" due to rising coronavirus cases.

An uphill battle: The growth in new daily cases in Japan has accelerated in recent weeks, rising from a low of around 1,000 per day in March to over 3,000 today. Japan has also been extremely slow at vaccinating its population, ranking even lower than Australia with just 0.9% of its population having received at least one dose.

What could go wrong?: What happens when you combine the world's oldest population with a global pandemic that's particularly lethal for older people and a sporting event that brings in around 10,000 athletes, 5,000 coaches and officials and several thousand more media from all over the world?

Answer: A disaster waiting to happen. The Tokyo Olympics are already the most expensive – ever – and at this stage it's unlikely to even take place.


Corona Wrap

The damage is done

Irreparable damage has been done to the J&J vaccine.
Irreparable damage has been done to the J&J vaccine. ABC

By pausing its rollout of the Johnson & Johnson vaccine, the US CDC has irreparably damaged confidence in COVID-19, according to those 'in the know'.

  • Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security in Baltimore, said: "The damage is done, this is going to be hard to resume. All [the CDC] can do is say how rare this is, show how safe and efficacious the J&J vaccine is. But this action is going to be hard to reverse."
  • Zeke Emanuel, a Professor of healthcare management at the University of Pennsylvania and a former coronavirus adviser to US president Joe Biden, said: "My concern is this will unnecessarily undermine confidence in the vaccine, and possibly all [Covid-19] vaccines. Are people going to know the difference?"

Yep. As with AstraZeneca, it's hard to recover from a "pause" and many lives will be lost because of it, mostly outside of the US (Norway, for example, could now see its vaccination timeline delayed by 3 months).


The Wrap Up

  • The US government is considering placing sanctions on Russia, "in retaliation for alleged misconduct including the SolarWinds hack and efforts to disrupt the U.S. election".
  • A Canadian politician, Pontiac Liberal MP William Amos, attended Canada's virtual House of Commons naked. He claims he was was changing into his work clothes after going for a jog and forgot to turn his camera off. The future of work...
  • Australia's 80 remaining troops in Afghanistan will be withdrawn, following the decision by President Joe Biden to remove US troops by 11 September.
  • Qantas CEO Alan Joyce suggested Singapore, Japan, Taiwan and some Pacific Islands might become travel bubbles before Australia's borders open.
  • Pfizer's CEO said a COVID-19 booster shot will likely be needed within 12 months as new variants emerge and circulate around the world.

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