Daily Commentary BY THE CURVE TEAM –

Vaccine Promise

16th of February, 2021

Long touted, vaccine distribution will shortly begin in Australia.

The optimistic mood for the economy is being buoyed by the vaccine rollout across the world. 16.4 of every 100 in the US and over 15 million people in the UK have received at least one dose.

The efficacy of the vaccine is also robust. Israel’s vaccine program shows that the Pfizer vaccine is 94% effective, which mimics testing of the virus.

142 000 doses of the Pfizer vaccine arrived in Australia yesterday, with the aim for 60 000 people to be vaccinated by the end of the month.

The speed of distribution is extremely promising, especially considering countries are prioritising high risk groups. Once a critical mass of the population is inoculated, Australian states will likely shift from aiming for zero cases to returning the economy to pre covid activity.

Vaccine effectiveness is not 100%, so if the economy opens up to pre covid levels there will be a portion of the population that get the symptoms of covid.

This is a relevant counter to optimism. If people are still fearful of getting covid and cases abound then it will impact activity. Nonetheless, there should still be an uptick of activity as more certainty arrives about borders and business activity.

Today, the RBA Minutes from the February board meeting are released today.

Josh Stewart

Associate - Money Markets