Daily Commentary BY THE CURVE TEAM –

More Scope for Economic Growth

8th of April, 2021

A government announcement provides more scope for economic activity.

The federal government has announced a travel bubble with New Zealand. This increases the scope for people to spend.

It is conditional on outbreaks, which may provide too much uncertainty to justify travel. However, the option being available should increase spending at least partially.

It also offers a glimpse of what could be to come elsewhere. There is the potential for travel bubble with other countries that contain the virus.

Of course, when a vaccine is distributed widely among the world, then travel can return closer to pre-covid levels. There was a slight spanner to vaccine progress, with Britain disallowing the AstraZeneca vaccine for under 30s.

This follows numerous other European countries simply halting the vaccine due to the rare potential of blood clots. Fortunately, there are other vaccines available so the aversion to AstraZeneca will simply slow down distribution rather than end it.

Overnight we also heard from the Fed. After the RBA’s update on Tuesday the tone from the Fed was very similar.

In fact, the tone from central banks has been unmoved for some months. They continue to state that interest rates will be unchange until there is sustainable progress made on inflation and employment, which they don’t believe will come for some time.

Josh Stewart

Associate - Money Markets