Daily Commentary BY THE CURVE TEAM –

Victorian Lockdowns Ease

27th of October, 2020

After 111 days of lockdown, Victoria recorded zero cases and announced the easing of stringent lockdown measures.

Dan Andrews’ fresh set of easing measures will have a significant impact on the economy. Although there will be capacity limits, retailers and restaurants will be able to re-open.

Although it is only a first step, hopefully it marks the beginning of even further unwinding of lockdowns. November 8 is being touted as the date when Victoria will ease restrictions further for businesses.

Beyond that, NSW has made clear they stand ready to open the border immediately when they consider it safe to do so. Such measures will be very timely, as it will coincide with the Christmas and New Year period, where spending is typically elevated.

Victoria has been a drag on Australia’s economy for the last 3 months. If further easing of restrictions eventuates then a clearer picture of the Australian economy will emerge.

Further to this optimism is positive vaccine news. AstraZeneca’s trials have shown very positive results for older patients and Johnson and Johnson believe they will have doses available as early as January.

A vaccine is considered crucial for the Australian economy, according to the government and considering that Covid-19 continues to spread elsewhere in the world. In the US, there are record case numbers, which would make the Australian government reluctant to open our borders to them.

In Europe, lockdown measures are becoming harsher. Spain has declared a night curfew, Italy has bars and restaurants closing at 6pm, and both the Czech Republic and Belgium signalled they are considering further lockdowns.

All this makes the outlook for containing the virus much more dire overseas. So without a vaccine, it is unlikely borders will re-open in the near future.

Josh Stewart

Associate- Money Markets