Cases in New South Wales out of control
The odds of Australia returning to a covid-free state any time has fallen to nearly nil. Daily cases in New South Wales are in excess of 800 and the public is growing restless with lockdowns.
NSW has moved to an even-tougher lockdown now so economic negatives continue to mount. At the same time, Australia’s rate of vaccinations is quickly picking up so there are some positives but it will still take a long time to hit the 80% vaccination target, with current rates around 30% fully vaccinated and 52% with one dose. At the current rate it will take until December to hit the target.
Prime Minister Scott Morrison acknowledged today that lockdowns can’t continue indefinitely.
″(Lockdowns) cannot go on forever. This is not a sustainable way to live
in this country,” Morrison said during a televised media conference in
Canberra. “Because if not at 70% and 80%, then when? Then when? We must
make that move and we must prepare to make that move and we must prepare
the country to make that move.”
At the moment, no one wants to buy the Australian dollar with the potential for lockdowns into August. If the vaccine pace picked up further or some restrictions are eased, there might be more willingness.
Technically, today’s rally is back above the 38.2% retracement of the five-day decline with the 50% level at 0.7244 and 61.8% at 0.7276.
In terms of the economic calendar, it’s vacant today for Australia so cues will come from China and vaccine developments. Tomorrow there are reports on trade balance and construction work along with a speech from the RBA’s Ellis.