Summary: Rising fears about omicron look set to delay the loosening of restrictions at the border. MBIE announced late last night it was delaying its latest room release for one day “due to the evolving situation with omicron.” Elsewhere, US stocks fell as much as 1.7% this morning on fears omicron would slow the global economic rebound.
Omicron changes likely – The government is expected to announce at 2pm if MIQ will be relaxed for residents returning from Australia on Jan 17, as originally planned, and whether to shorten the waiting period for booster shots. Doubts about the reopening plan are growing as omicron spreads in Australia and the rest of the world. There’s also concern MIQ stay lengths could be extended back to the full 14 days. Announcements are also expected on speeding up the booster shot programme and the vaccinations of 5-12-year-olds.
MBIE delays MIQ releases – MBIE announced last night via Twitter it had delayed the release of the latest block of MIQ slots for a day until tomorrow morning “due to the evolving situation with omicron.” That would give MBIE time for any change in government stance to be announced later today by covid-19 response minister Chris Hipkins after a cabinet meeting yesterday. “We need to carefully manage capacity as more travellers spend longer in MIQ. This reduces available rooms in MIQ,” MBIE wrote.
Omicron fear dominates – US stocks fell again this morning on fears widening omicron restrictions on gatherings across Europe would hurt the global economic rebound. The S&P 500 was down 1.7% at 7.30 am NZT, while the NZ dollar fell to fresh 14-month lows around 67.20 US cents on increased risk aversion in global markets.
Fiscal policy blow – US stocks were also weak in the wake of the blockage in the Senate of US President Joe Biden’s flagship US$1.7 trillion ‘Build Back Better’ plan for social and climate spending. Goldman Sachs lowered its US GDP growth forecast for next year because of the resulting contraction in fiscal stimulus.
Latest covid news – Overnight, Moderna reported its booster dose appeared to protect the vaccinated against omicron. The World Economic Forum cancelled its in-person talkfest of billionaires due to be held from Jan 17-21 in the Swiss ski resort of Davos because of omicron. Australian PM Scott Morrison called a snap cabinet meeting of state premiers for later today because of omicron. Experts have called for a rethink of Australia’s reopening plans as case numbers hit record highs in New South Wales.
Oil down too – The global selloff extended to oil prices too. Brent crude prices fell more than 5% overnight to just under US$70/barrel.
Fresh on BusinessDesk this morning
Opposition finance spokesman Simon Bridges writes in an Op-Ed the government’s increased spending risks rousing the inflation dragon.
