Here's our summary of key economic events overnight that affect New Zealand, with news that some of the bounceback data in June coming through is better than expected.
But not all. The latest weekly update shows that American workers filed 1.5 mln new unemployment benefit claims and 20.5 mln people received jobless benefits. Both levels are higher than expected and only marginally lower than the previous week, so the pace of layoffs remains high but does seem to be stabilising.
Another survey shows that the richest quarter of Americans have cut their consumer spending more than any other income group during the pandemic and much of that cut was at the expense of low-income wage earners. Small businesses in wealthier regions laid off 65% of their low-wage earners, while in the lowest-rent areas, fewer than 30% lost their jobs.
Very much more positive however is the latest factory survey from the Philadelphia Fed (+27). It is an impressive result, quite unexpected (-23). Just about every sub-category in this survey improved, and especially new orders (+17). The only laggard was the employment aspect (-4).
Another very positive set of data comes from north of the border. The Canadian ADP employment survey also surprised with expanding jobs data in May (+208,000) when another decline was expected (-280,000). It is actually the largest monthly gain since this survey began in 2012. But is only making back less than 10% of the jobs lost in April.
Foreign direct investment into China rose +4.2% from a year earlier in May, marking the second straight monthly increase, although the growth pace slowed significantly from +8.6% in April. In the first five months of this year, foreign direct investment into China was down -6.2% year-on-year.
The Indonesian central bank cut is policy rate again, the third such cut this year taking it down to 4.25%. It also lowered its growth forecast to less than 2%.
The English central bank reviewed rates as well but didn't cut them. Instead it threw an additional NZ$385 bln of QE at their economic problems.
Australia shed -227,000 jobs in May, with the unemployment rate reaching 7.1% and its highest in twenty years. Part-timers have been especially hard hit. When the losses in April are added, it means the country has now lost more than -824,000 jobs over the past two months. Worse, their participation rate is falling sharply, meaning another -420,000 left the labour market since March.
Overnight European equity markets fell a bit more than -0.5%. They followed Shanghai and Hong Kong yesterday which were both virtually unchanged. Tokyo however came in -0.5% lower. This morning the S&P500 is down -0.4%, unable to find any positive direction in late trade. Both the ASX200 and the NZX50 lost almost -1% in trade yesterday.
Shares in German payments company Wirecard have fallen more than -60% after the firm said its auditor had raised questions over cash balances worth NZ$3.3 bln or a quarter of what it is supposed to have. Wirecard is no minnow - it is a component of the German DAX30.
The latest compilation of Covid-19 data is here. The global tally is now 8,400,300 which is up +139,000 in a day and still a fast rising pace. Global deaths now exceed 450,000.
A quarter of all cases globally are in the US, which is up +25,400 since this time yesterday to 2,173,800. That is the highest daily rise since mid-April. The spread into 'Red' states is quickening. But 'Blue' state California is also a hotspot. US deaths now exceed 118,000.
In Australia, there have been 7391 cases (+21 since yesterday), 102 deaths (unchanged) and a recovery rate of just over 93% (unchanged). 14 people are in hospital there (-2) with 2 in ICU (-1). There are now 412 active cases in Australia (+14).
The UST 10yr yield is down -5 bps today at 0.69%. Their 2-10 curve is holding at +54 bps. Their 1-5 curve is also holding at +16 bps, while their 3m-10yr curve is unchanged at +61 bps. The Aussie Govt 10yr yield is -7 bps lower at 0.86%. The China Govt 10yr is virtually unchanged however at 2.89%. And the NZ Govt 10 yr yield is also little-changed at just over 0.86%.
The gold price is marginally lower, down -US$3 to US$1,724/oz.
Oil prices are marginally firmer today, now just under US$39/bbl in the US. The Brent price is just under US$41.50/bbl.
The Kiwi dollar is a little softer this morning, down -½c at 64.3 USc. On the cross rates we are a little firmer at 93.9 AUc. Against the euro we are marginally softer at 57.4 euro cents. That means our TWI-5 has slipped to 69.3.
The bitcoin price is still in its quiet phase, unchanged at US$9,420 today. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
Our currency charts are here.
108 Comments
Aus active cases still rising daily
No Tasman “bubble” thank you
Their unemployment taking off as NZ will in 2 months
Yep and they've just introduced another covid case from Oz to us, so now we're up to 3 newly imported covid-19 cases. Apparently people were crammed on to flights with no one wearing face masks other than flight attendants.
Looks like the pandemic is now at phase II. Countries whose lock down didn't eradicate the disease have to open up again because they can't survive economically so just have to manage the consequences. Countries who managed to eradicate the disease now have to continue on that track and have secure borders to stop any reinfections,with lots of good processes and testing to support the eradication (NZ needs some reform here).
I suspect once the most virulent version of the disease becomes weak enough to not kill a reasonable percentage of people, we will reopen with officials watching very closely. That's potentially 6 months to several years away. Unless we get really luckily, a viable vaccine is likely years away too.
IMO we need to prepare for pretty much closed borders for 2-3 years.
Question.
Are arrivals paying for their 'quarantine' costs?
No. 4 person families are getting up to 3 rooms at the crown plaza - so they can work from home. I can see why the homeless guy sneaked in.
profile. The homeless guy freeloading is the best news story of the week. Hilarious that he scored a free hotel stay on the taxpayer dime while at the same time demonstrating MOH incompetence at not only randomly letting infected sheep out without drenching them but also being asleep at the drafting gate end of the pen.
No the govt is paying and it costs $6200 each
Novotel must be loving it government is paying full price as usual.
They should have just purchased some hotels from Kiwis who are in big trouble rather than support overseas owned chains.
I suppose it is similar to those being de- housed during National's era in regards to the 'P' problem which turned out to be a monumental disaster as the houses were destroyed for no sound evidence.These people are still in motels six years (plus) later. And for what cost ???
Leftie deflection
If you want to get on a plane to NZ you have to do quarantine and you should be expected to pay for it.
Humanitarian reasons exempt.
Govt paying?
Yes, meaning you and I paying through PAYE or income tax
If I remember correctly, the govt were paying you to let some people stay at your motel back when the lockdown started. So you're probably still in the positive.
Yvil runs motels and has rental properties. He's probably been negative gearing from way back. Surprised he knows what PAYE is - although guess he probably has some low paid motel cleaners etc that he needs to pay, who they themselves require top ups via government subsidies to afford to live in NZ.
No - see the clever homeless dude in Auckland that joined the end of the queue and got 2 weeks free on the taxpayer. But as this continues, I think you can expect to start paying. Because travel is basically elective, the govt won't be forking it out forever. 3200 hotel rooms @ ~6k per room (food as well and admin) = $19m every 2 weeks or $500m a year. That's not sustainable.
Time to chuck up a few 1000 garages as temporary accommodation on a field somewhere in Auckalnd region?
Take out the word temporary and it pretty much sounds like the Auckland housing market.
Over $425 per day per room. Usually can negotiate good discounts for volume. $100 plus food should be easily do-able
Yeah but then we wouldn't have corporate socialism, which is what we need to continue for the economy to function...
blobbles the question is also if we have the capacity to keep the disease out. My experience and the evidence to date is that NZ got very lucky. That luck will run out. It is obvious now there is no such thing as accountability: the two women who clearly knew they had Covid are even being given a pass for lying about their contacts once they left isolation.
I tend to agree Mike. Unless there is radical tightening in border controls, it would appear that its only a matter of time until we have the next outbreak here and start going back through the levels of lockdown.
Bubble with Australia - can't see until late this year, if at all. How could we make it work if they're having the same issues we're having with foreign arrivals?
The recent lapse was a shocker, but the shock I think we needed. I am happy it happened this early, I am also happy everyone is outraged and applying pressure to the govt. It is likely the capacity to handle it is being constantly reviewed and upgraded. I think it's important to note that we will always get "oh no we should have done this better" issues, as anything that involves humans usually ends up with people finding the gaps. With the military running the show now, let's hope they can run it with military precision, but not with peacetime military slowness. As long as smart people are making the right calls, we should hopefully be able to handle small outbreaks anyway.
A mate of mine is now in self isolation in Wellington because someone presented on his office floor with COVID19 like symptoms. We aren't out of the woods by any stretch yet and complacency by kiwis thinking we have beaten this is very poor. There could still be undetected cases around the country from the first outbreak. I think we have to start thinking that this is a multi-year war, we won the first battle but the enemy is out there waiting, ready to pounce. To keep them out we have to act quickly and effectively to manage any "attacks", which WILL come. Military planning I think is key here, this type of event does have many the same characteristics as a war.
Can they really send you home just because someone in your office presented with symptoms?
Anyone presenting sick at offices should be kicked home. Not just a covid19 problem.
Yeah, work from home or wear a mask if you can't. Cheap way to create huge benefits in reduced sickness.
Yes I believe under Alert Level 1 and the special powers the health official have at the moment, if you are told to self isolate, you must do so. From what I have read, the COVID-19 Public Health Response Bill gives the MOH public health officials permission to order people around, under the direction of the PM. Essentially it makes it a lawful order to protect public health and you can be imprisoned for not complying.
Under the direction of the PM.
It's a goose gander situation.
Public health officers can require you to self-isolate. Your boss can't. All your boss can say is "don't come in to work, and work from home", which most people if they have the capacity to do so, would not have a problem with.
Agree..how someone obviously showing symptoms is allowed to leave untested is completely insane. We obviously got lucky but DHB must be run by morons.
Per Sharetrader's comment from yesterday:
https://www.bangkokpost.com/thailand/general/1937000/returnees-from-nz-…
Four Thais returning from New Zealand were found to have a high fever on their arrival at Suvarnabhumi airport on Wednesday night.
Health and airport authorities said the four returnees were taken to a hospital after health screening at the airport detected high body temperatures.
Cindy did say she was only going to eliminate the virus not eradicate it. She has "zero tolerance for cases".
https://www.newshub.co.nz/home/politics/2020/04/coronavirus-definition-…
What concerns me more is a) assuming it's Covid and not just generic flu and b) assuming they didn't catch it at the airport or from the flight crew, that only leaves us with the logical assumption that they caught it out in the wild. I'd like to know what the MOH does in a situation like this should it be confirmed they have Covid19.
Air NZ are soon to start flights with Shanghai. Emirates to start flying to Auckland from July 1. Are you confident we have the facilities to cope with this at the border? Recent events suggest we will struggle to keep this virus out.
As I have be saying all along 200 billion for the Jacinda show as soon as borders open we will be back to FEB2020.
I understand Muller and Bridges will be on the first flight. I wonder why ???
Need to top up the Nat party coffers.
And receive updated orders, perhaps?
They haven't been performing well so they are probably being sent to spy school, or to a reeducation "camp".
Nah, just getting their batteries changed.
Going to the CCP bot service station for oil and filter changes.
Cindy off to Moscow?
Russia as a lord compared with China and the US doesn't appear to be a bad option right now. That's how bad things look to be getting.
If they start flights again, the cost of quarantine needs to be paid before stepping on the plane.
Who are the people flying to NZ? Business people, they meet their own costs, people escaping the virus, they need to meet their own costs. Kiwi's returning, they should have come back sooner and now pay their own costs.
NZ is not some cash cow being milked by people with their own agenda!
Enough of the 'poor you, we will help'.
So Tony Alexandar states NZ will have a short lived recession, with economy bouncing back by September ???
If wishes were fishes we'd all cast nets.
Another person talking about a V shaped recovery. Perhaps someone with a better understanding of economic history could comment instead of Tony Alexander.
I've received information about job losses with respect to those in the construction industry. I'm not going to get too specific but there's just not enough work in certain areas to maintain staff so difficult decisions are being made right now for companies to survive. The data for this quarter is going to be bad but Q3 is going to start showing some of the problems.
What I think many people fail to understand is once the big rounds of cuts are made, they don't need the people whose job it was to sharpen the knives anymore. That's when things might get real.
I read TV (Tony's View) every week and I cannot remember him writing that, can you please post a link? Thanks
It was commentary on NZR this morning.
Clueless idiot....
I am no Tony A fan but I think he will be right on this. But let's put it in perspective, it's pretty easy to 'grow' the economy after the likely awful dip in the June quarter. It doesn't mean much, really. It's how sustained that grow is into 2021 that is important.
What a tool. Total garbage
That is unbelievably obvious and very well forecast by all ... when you say Sept you mean sept qtr. June qtr ends in 2 weeks capping a huge negative. From there a huge bounce back which has already commenced. Quick recession equals 2 consecutive quarters of march and June.
Do we still have a possible Covid patient on the run after a gang funeral?
Maybe we do, maybe we don't but they definitely haven't had contact with anybody else over that time and did not hug anyone but wait they did touch someone.
zero media follow up
Stuff wrote about 10 articles about the Avatar crew flying into Wellington, trying to whip up a drama, all of which amounted to nothing. Not a peep since this story broke though. What gives?
Dont even bother reading Stuff news.
It was followed up. The kid was tested - negative - and is in isolation
At this moment nothing make sense in term of economy. Even experts are confused but as are trained will come up with a theory after the event (why it went up or why it went down).
Nothing is based on fundamental and everything is based only on QE - Money printing. Are we not entering into extremely dangerous territory ?
Current situation is like a baloon - when blowing have blown/stretched to a level that can burst anytime but for some reason is still allowing to be inflated.
https://www.msn.com/en-nz/money/news/south-island-likely-to-be-hardest-…
"The southern regions will be the most adversely affected by the severe economic recession, while Wellington and Auckland have the best prospects for recovery, a Westpac report is predicting. .."The best prospects for recovery lie in urban industries like services, distribution, and digital technology," the report says."
Brilliant conclusion
We can all eat more pixels
There's a recovery in Wellington it's just that going from near 0% activity to maybe 50% in some sectors is not a full recovery.
Not a good look when AMP is leaving its Auckland based premises.
They have been going backwards ever since their Oz masters made them sell off a few properties just as the market was on the up post GFC - to balance the books accross the ditch?
You couldn't make it up - the new leader of the opposition found the safe in his office locked, no sign of the combination, so he called in a safebreaker to open it. Now it appears a member of his staff had the combination all along!
Riveting stuff alright. You should be a journo for Stuff!
So much for the party of competence, eh?
Goes for pretty much every party we have in NZ. No need to blow anymore smoke up our politicians.
And all they found was a CCP manual and a green cap with a red star on it?
oldbloke1. Plagiarism. You pinched that story from The Standard where it is headline breaking news story number 1 given there is nothing else of any significance happening right now in NZs political world.
Oh dear Frazz sarcasm, but damn enjoyable sarcasm!
Frazi can I play
https://thebfd.co.nz/2020/02/29/chinese-donorvirus-spreading-now-dalzie…
The Chinese Donorvirus is spreading fast, now Christchurch mayor, Lianne Dalziel, is under investigation by the SFO for some allegedly dodgy donations:
Police have referred a complaint about Christchurch mayor Lianne Dalziel’s election expenses to the Serious Fraud Office (SFO).
Then there is the pantomime of the good people of Christchurch drinking chlorinated water, and soon to pay the council for it, whilst given away for free are billions of pure clean water to a Chinese bottling company to sell for great profit in their homeland. And tangled up in that somewhere the partner of the Mayor of Christchurch, is said to have represented the bottling company. Certain wheels only turn for certain people for sure.
And the 'it's Fer Yer Own Good' Council has in the process of inept chlorination foobarred thousands of HWC at a replacement cost to the good citoyen of several tens of millions of private munny.....but That's not in the CCC's performance criteria so go pound sand.....
Yep, to use your nomenclature, them that know best strike yet again. All authority, no responsibility.
Best to get Todd Muller on that issue.
Decent surge in properties listed for sale in Auckland over the last 30 days, rental listings picked up sharply but have since come back down.
record_date | sale | rent
-------------+-------+------
2020-05-20 | 10505 | 5180
2020-05-21 | 10579 | 5199
2020-05-22 | 10581 | 5213
2020-05-23 | 10583 | 5246
2020-05-24 | 10594 | 5250
2020-05-25 | 10575 | 5246
2020-05-26 | 10597 | 5266
2020-05-27 | 10618 | 5260
2020-05-28 | 10603 | 5291
2020-05-29 | 10604 | 5282
2020-05-30 | 10588 | 5280
2020-05-31 | 10576 | 5284
2020-06-01 | 10558 | 5249
2020-06-02 | 10511 | 5303
2020-06-03 | 10549 | 5361
2020-06-04 | 10644 | 5332
2020-06-05 | 10667 | 5315
2020-06-06 | 10669 | 5335
2020-06-07 | 10656 | 5327
2020-06-08 | 10611 | 5310
2020-06-09 | 10621 | 5305
2020-06-10 | 10657 | 5272
2020-06-11 | 10721 | 5255
2020-06-12 | 10759 | 5209
2020-06-13 | 10767 | 5206
2020-06-14 | 10764 | 5186
2020-06-15 | 10732 | 5160
2020-06-16 | 10731 | 5176
2020-06-17 | 10767 | 5169
2020-06-18 | 10832 | 5177
Thanks for the data ShoreThing, hope you keep it up
Yup. I make it approximately the same stock level as this time in 2017 now. Still well below 2018 and 19 though. There's a little surge, but not yet a massive rush.
People I know are selling up and renting for a while. Why? They believe prices are in for a big fall.
That's my instinct too - but I know I'm likely to stay put for the next couple of years at least, so the risk of a drop in value is offset by the medium term outlook and the reduced interest rates. Swings and roundabouts. If I had a move planned in the next 12 months I'd be looking to get out now and rent for a while to see how things shake out.
Well if Australia's property prices fall then so will ours, apparently their Reserve Bank economists considered urging the Federal Government to shut down the real estate industry, "pausing" sales of established homes to avoid perceptions of a coronavirus-inspired housing market crash.
Documents from inside Australia's central bank, including many marked "highly restricted", also suggest house prices could slump up to 15 per cent.
ABC News: Reserve Bank considered asking for real estate transaction 'pause' amid property crash fears. https://www.abc.net.au/news/2020-06-18/reserve-bank-considered-asking-f…
Australian data has long been questionable, for precisely this reason. Take a look at how many times they've had to 'restate' unemployment figures in the following quarter.
.
just a pent-up-demand thing from lockdown? I guess some people who have lost work could be locking to relocate to cheaper digs as well.
Trouble with looking at the for sales figures is that we cannot know how much of any increase is due to reduced flow out of the total.
That is, the crux is the rate of flow of sales consequent upon the listings being put on.
The way to measure this, over time, is to look at how long a listing has been on and especially those over 3 months.
BUT this is hampered by RE trick of taking it off and putting it back on again later, when the number of days count starts again.
There is a property in Stanmore Bay that has been on and off market for 3 years (over-priced expectation) and not going to sell.
Other issue is that between 25 and 40% of what RE NZ lists as a listing of a "house or townhouse" is NOT, because it is a lot, or an unbuilt chance to build, or it's not finished.
So, it is tricky.
When REINZ shows sales figures for June, about July 14th, we will know what is really happening.
Listings in Hibiscus Coast are running 35% below a year ago and were doing so in February also.
New listings per day is another useful metric, to compare with same period in 2019. At moment in Hibiscus Coast,t hat metric is pretty similar to same period in 2019
Totally agree mike, I'm looking into more ways to gather the additional data required to uncover those insights. In general, there is a lack of good quality data relating to the NZ property market - probably the best we get is the REINZ market data at the moment, and even that has limited use. I'm working on improving our access to good data.
Who can save the economy for the majority - certainly not a central bank?
Fed Chair in House Hearing on Financial Services: "The private sector is not involved in creating the money supply" Link
Mr Powell, can you please read these papers?
Lost
https://sciencedirect.com/science/article/pii/S1057521915001477Can
https://sciencedirect.com/science/article/pii/S1057521914001070How
https://sciencedirect.com/science/article/pii/S1057521914001434
Link
Yes its got to the point now where I don't know what central banks stand for. Their behaviors favour capital asset owners (primarily property) and given the reducing rate of home ownership in NZ, that means their behaviour is favouring less and less of the population each year.
ECB advice: "a European response is required... to avoid economic fragmentation". I'm serious.
In fact it has been the ECB that has crucified the peoples of Europe on a cross of euro.Link
Double the QE has nearly doubled the ZEW, but yields remain obscenely low (and therefore negative). No inflation on nor over the horizon, barely an improvement from the GFC2 flush. Link
This beggars belief.
https://i.stuff.co.nz/national/politics/300038167/housing-minister-mega…
Prime Minister Jacinda Ardern has asked her Housing Minister Megan Woods to take over the control of housing and isolating returning Kiwis following a litany of failures with the process this week.
Woods is not taking the role over from any single minister as it was handled as part of the All-of-Government response.
Govt slowly realising we have to get serious about border security, quarantine etc?? I wonder...
Woods was bought in to fix kiwi-build a year back with no noticeable improvement. Seems likely that this is likely just addressing the need to be seen to be doing something while doing nothing of substance.
She's been missing in action on housing. Maybe that's seen to be better than talking a lot and doing nothing....
It's a mixture of incompetence & parody, made even funnier because its supposed to be serious. I'm sorry, I have to laugh or I'd cry.
Nick Smith went backwards in his role and ended up putting kiwis into motels six plus years ago. What is the cost to date.....???
Nick Smith went backwards in his role and ended up putting kiwis into motels six plus years ago. What is the cost to date.....???
Cyber Attack after Bilogical attack :
https://www.google.com/amp/s/m.hindustantimes.com/india-news/china-step…
https://www.newshub.co.nz/home/world/2020/06/cyber-attack-underway-agai…
Can a country become super power by doing all this type of activity. Even domcracy have their own problem (USA) but still more transperancy and accountability also can vote and bring change unlike dictator state.
Whether or not this is true it is all part of a cold war that will likely lead to physical war. You'd think India would be well place to do a bit of retaliation on the cyber attack front, they are training pleny of people in that field.
Hello Sailor
https://www.odt.co.nz/news/dunedin/concern-reports-sailors-disembarked
Epidemiologist Sir David Skegg told RNZ on Wednesday that sailors whose ships had berthed at Port Otago were understood to have left their vessels, and he doubted that all of them had been tested for Covid-19 beforehand.
"I’ve been concerned to hear about crew of ships wandering around Port Chalmers in Dunedin, even going to healthcare facilities," he said.
Why do i feel Mr Covid has been wandering the country all year laughing his head off.
Note that NZ news at 6, on Channel 1 and Channel 3, NEVER quote active cases in Aus, which are INCREASING.
They love quoting USA, in a mocking tone, all the time.
Yet same news broadcasts keep quoting the save tourism trope (ie Queenstown) and whingeing about Min of Health being to blame when officials did not do what they are told to do. Like the opposition equivalent would have been at Auckland airport checking them all? Not.
Government accountability has literally nothing to do with the hypothetical performance of the opposition. Anything to avoid actual scrutiny eh.
It's not proven this was China but there's a reasonable chance it was. All you China lovers out there (not many, I know, but the editors seem to be fond of them), you really need to think twice.
https://www.rnz.co.nz/news/world/419384/foreign-government-accused-of-m…
And here’s the link to Tony telling us the recession will be over at the reporting of the 3rd quarter GDP results...that’s some glass half full optimism he’s got there..
https://www.newshub.co.nz/home/money/2020/06/covid-19-new-zealand-s-rec…
Good news. No need to sack poor old health minister. Just get housing minister, and others, including Defence Ministry people, to be allocated bits of his work until it is all reallocated. Problem solved.
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