Daily Commentary BY THE CURVE TEAM –

Covid Continues to Disrupt

11th of January, 2021

Containment of covid remains the priority for Australia.

Brisbane went into lockdown over the weekend as the more contagious UK strain was detected. An update on whether this will be lifted will come early this week.

NSW and Victoria continue to record low numbers, which is a positive sign that the virus is being contained. But while case numbers remain economic activity will continue to be hit.

This will occur explicitly, for example by Brisbane and individuals self isolating. It will also be indirect, for example by people being less likely to go out and spend because they are concerned about the virus.

Vaccines are expected to be rolled out in February, which is earlier than initially expected. Given the impact of the virus on economic activity, until a large portion of the population are vaccinated state governments will continue to prioritise containing the virus.

Today monthly inflation numbers for December and retail sales data for November are released. Retail sales are expected to show a 7% lift for the month following Melbourne’s reopening.

On Friday loan value data will be released for November.

Josh Stewart

Associate - Money Markets