Vaccination Allocation Horizons

Good morning! It appears that the Sydney cluster has become an Australia cluster, with new community cases picked up in the NT, WA and QLD over the weekend. The country's domestic borders are now largely closed (including the bubble with New Zealand) and Sydney and Darwin are both effectively in full lockdowns. Restrictions were brought into QLD, the ACT and WA, with the latter scrapping footy crowds, limiting indoor gatherings and requiring masks indoors and on public transport in the Perth and Peel regions.

All because an airport limousine driver transporting international flight crews was for some reason permitted to work while unvaccinated, with no mask and not subject to regular COVID-19 tests. That and the snail's-pace vaccine rollout, of course.

Speaking of which, if you haven't been vaccinated, go and do it (if you're allowed) – these outbreaks will continue to happen given the inherent leakiness of hotel quarantine and competency levels of those making and enforcing the rules.

Markets

The US S&P500 (0.33%) hit another record high on Friday, buoyed by US core PCE inflation coming in slightly below market expectations (see below).

Inflation watch: The US core PCE index – the Fed's preferred measure of inflation that strips out food and energy prices – jumped 0.5% in May to its highest level since 1992, bringing the increase over the past 12 months to 3.4%, or almost double the Fed's annual inflation target of 2%. Transitory though, so nothing to worry about, right?

China slowing: Industrial profit growth at large firms in China slowed to 36.4% in May (from a lockdown-affected base last year), down from 57% in April, "as surging raw material prices squeezed margins and weighed on factory activity".

Analysis

Vaccination Allocation Horizons

Targets are taboo in Australia given the tendency for them to be set too optimistically and made mathematically impossible several months in advance. So the government's spin doctors came up with a new word (or rather, phrase): the National Vaccination Allocation Horizons.

Stepping back: The last target set by the government was to have 4 million people vaccinated by the end March, which it missed by about 3.3 million, or 83%. Front-line health and aged care workers were to be fully vaccinated by Easter, with the latest estimate now sometime in August. To save face, ScoMo just ... stopped providing any kind of forward-looking vaccination guidance for around 3 months.

Between 14 March and 24 May, Australia even stopped publishing data on the number of first doses it had administered. We weren't alone, though – other bastions of freedom such as Congo, Benin, Turkmenistan, Papua New Guinea, Gambia, Djibouti, Armenia, Nicaragua, Rwanda, Myanmar, Comoros, Algeria and the United Arab Emirates were similarly reluctant to make their first dose vaccination data public.

Why this matters: The government's Vaccination Allocation Horizons provides an estimate of the number of doses the government expects to be able to allocate. It looks like a remarkable ramp-up until you exclude all but 4.2 million AstraZeneca doses (roughly the amount needed to double-dose those who have already had it), at which point it shows that we will only have enough doses to vaccinate 80% of adults by around the start of November.

However, having doses is only one part of the puzzle. The early doses are the easiest to administer: right now there's no shortage of people who want to get vaccinated. But other countries have found that their vaccination rollouts have become incrementally more difficult over time, with rates slowing considerably once around ~60% of the adult population have had a first dose (just 50% in the US!). We're only just over 20% and yet in Queensland, tens of thousands of people have already no-showed their second Pfizer dose appointment. Not a great start.

That means if the government really is expecting an imminent supply windfall (~1.2 million Pfizer/Moderna doses per week by September), it needs to start selling the vaccine with an incentive programme ... well, now!

The Wrap Up

• The gang's getting together again – ScoMo called his second emergency national cabinet in two weeks, with a meeting to be held later today "to discuss the next steps for the nation".
• ScoMo ruled out faster vaccinations for 20-39 year-olds – the most active spreaders of COVID-19 – because "the priority cohort groups of people were set out in the national vaccination strategy which went through national cabinet". Yes, because nothing ever changes in a pandemic so all decisions are final... 🙄
• Perth, Brisbane and Melbourne will be getting Commonwealth-funded purpose built quarantine facilities, due to be operational early next year. State governments will cover the daily running costs.
• "Three New South Wales travellers who fled their COVID-stricken State have been arrested in an outback karaoke bar in South Australia."
• Darwin's lockdown was triggered after a fly-in fly-out gold miner potentially exposed 900 people to the Delta variant, all of whom had already dispersed across Australia. A further 754 workers at the mine were forced into isolation.
• Compulsory superannuation will increase from 9.5% to 10% on 1 July. More than a quarter of Australia's top 20 listed companies will deduct the different from people's take-home pay.
• The US Food and Drug Administration added an official warning label to the Pfizer and Moderna vaccines for rare occurrences of heart inflammation most common among people under 30.
• "San Francisco's homelessness department [spends] more than $US60,000 per tent, per year... about twice the median cost of a one-bedroom apartment."
• China plans to launch a manned mission to Mars in 2033.
• He's back: Donald Trump held a presidential rally in Ohio.
• Tesla had to recall 285,000 cars in China over a cruise control "accidental acceleration" issue.
• The pandemic is over for elites: UK Health Secretary Matt Hancock resigned after being caught on CCTV breaching his own COVID-19 restrictions to carry on an affair with one of his aides.