The yield on the 3-yr dropped circa 4bps, reflective of expectations any RBA winding back of stimulus is further away.
As the outbreak accelerates its becoming less and likely the Reserve Bank of Australia will simply 'look through' this latest surge in infections. There are plenty of media headlines that the current lockdown is 'likely' to be extended beyond Friday. 'Likely' is not even close, try 'absolute certainty' instead. The government of NSW says it is unable to predict when the lockdown might end, a comment displaying an honest assessment indeed.
Keep in mind the Federal government support for business and jobs/wages ended months ago. NSW state is cobbling together support but its at a lesser scale than what was around earlier in the pandemic.
Its a dog's breakfast in Australia re vaccinations, with conflicting messages on the safety of the only widely available vaccine, Astra Zeneca. And hesitancy amongst the population to get vaccinated with it only being compounded by these conflicting messages. Ample supply of alternative vaccines (eg Pfizer, which is what folks seemingly want) is not imminent and when supply does arrive it'll be targeted first at older people, not the young who tend to more engaged with the workforce and out and about.
Yep, dog's breakfast.
AUD is showing little response, perhaps the bond market is out in front?
