Hospitalisations could pose risk to reopening

New South Wales and Victoria look set to remain under heavy restrictions until the vaccinations thresholds can be met. But with cases and hospitalisations surging there is a risk that hospitals will begin to approach maximum capacity. That could force states to delay reopening to avoid overwhelming the healthcare system even once 70% of their population are fully vaccinated and poses some downside risks to our optimistic Q4 GDP forecast. Meanwhile, New Zealand is doing well in its latest outbreak with cases falling and vaccinations surging. On that basis, we now think the RBNZ will press ahead with hiking rates in October.