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The vaccination surge

Good morning! Victoria's contact tracers managed to genomically link Melbourne's mystery COVID-19 Delta variant (a strain originating in India) to a man who arrived in the city from Sri Lanka on 8 May.

While there's still no epidemiological link, it hopefully won't take authorities long to trace one down given it was almost certainly spread during the man's stay in hotel quarantine. That's good news for Melbourne, which may actually be allowed to exit lockdown later this week as planned. 🙏

Markets

Daily % change

AUD/USD

77.4

-0.3%

10Y Bond

1.57

-1.4%

ASX200

7,293

0.2%

Brent (bbl)

72.2

1.0%

Gold (oz)

1,895

-0.4%

Iron ore (t)

200.8

4.6%

Bitcoin

33,713

-1.8%

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

US markets were flat for the second consecutive day, with the S&P500 rising just 0.02%. Bitcoin declined again as the fallout from the disclosure that the US government had recovered almost all the Bitcoin ransom paid by the Colonial pipeline continued to take a toll (a public ledger is exactly that... public!).

Businesses upbeat: NAB's monthly survey for business conditions hit a new record high in May, surpassing April's record by 5 index points. Every sub-component increased, with trade, employment and profitability all hitting record highs.

M&A boom: What do you get when you cut interest rates to zero? According to The Australian Financial Review's tracker, you get $US64.3 billion in mergers and acquisitions, "eclipsing the golden era of M&A that arrived in the wake of the global financial crisis and peaked in 2011, when $US56.9 billion of deals were announced to this point in the year".


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Analysis

The vaccination surge

Nothing like a crisis to kick people into gear.
Nothing like a crisis to kick people into gear.

We've updated our daily vaccination tracker to show how Australia is progressing towards the ultimate goal: 80% of adults fully vaccinated, which should be sufficient to lower the hard international border.

Why 80%: We've assumed that 20% of the adult population have health or other reasons not to get vaccinated (e.g. anti-vaxers). The world leader in COVID-19 vaccinations, Israel, has administered first doses to about 84% of its adult population and the growth rate has stalled. In the UK, the number is around 79%. It remains to be seen whether any country will be able to go much beyond that.

Going well: The latest Melbourne outbreak really woke people up to the risks of COVID-19. Hotel quarantine is leaky – we should expect some form of failure every couple of weeks – which means vaccine complacency is a risky strategy. We're now averaging over 100,000 doses every day, which if sustained (and that's a big IF) will see 80% of adults fully vaccinated by mid-January 2022.


The Wrap Up

  • Western Australia opened COVID-19 vaccinations up to anyone aged over 30 (we made a booking but it took a while as the website was dealing with "a large volume of people registering"). Perhaps open borders by Christmas is still a possibility? 🤞
  • In mid-July New South Wales will open a second mass vaccination centre with a capacity of 20,000 jabs per week at a former Bunnings warehouse in the Hunter region.
  • Australia's Therapeutic Goods Administration approved private sector vaccination incentives, such as "store vouchers, discounts or frequent flyer points", but they cannot include alcohol, tobacco or many medicines. No word yet on public sector incentives...
  • The Productivity Commission warned that two "dark clouds" – government debt and increased protectionism – could threaten Australia's economic recovery. The warning came after ratings agency Moody's said Australia's productivity growth rate was below that of Britain, Germany, France and Japan.
  • You know it's an election year when in a speech ahead of the G7 summit in Cornwall this weekend, ScoMo will ramp up the rhetoric against China, calling for a world that "favours freedom over autocracy".
  • Several major websites went down last night due to an issue with Fastly, a major cloud-based content delivery network (CDN).
  • A new species of dinosaur, "Australotitan cooperensis", was found in Queensland, believed to be one of the world's 15 largest.

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