Here's our summary of key economic events overnight that affect New Zealand, with news markets are not impressed with some positive economic data, rather seeing rising problems ahead.
US retail sales bounced back in June by a bit more than expected and boosted by car buying. They were up +2.3% compared to the same month a year ago, making back a little of the -7.2% equivalent drop in May. For the first six months of 2020, they are still -3.4% lower on a year-on-year basis and that is the loss of -US$102 bln of retail impulse. But that may be the best it gets with lockdowns and restrictions on the rise in the pandemic fight.
Last week's American new jobless claims were 1.5 mln and at the expected level. There are now 17.4 mln people on this support or 11.9% of the workforce. In the next few weeks this will start tailing off as benefits for early claimants expire.
And the average interest rate on its dominant 30-year fixed mortgage fell to its lowest level in almost 50 years of record keeping at now under 3%. It is the third consecutive week and the seventh time this year that rates on America’s most popular home loan have hit a fresh low.
China's house prices rose +4.9% in June, the same rate as for May, with much of the impetus coming from major second tier cities. It is a trend Beijing's loose money policies fed, but they didn't really want that 'investment' to leak into high-rise property. They are scrambling to undo what could become a dangerous bubble. It is a bubble that has recently been estimated at a massive US$52 tln.
Retail sales fell -1.8% year-on-year in June which was a result worse than the small gain expected. And it is just miles lower than the +9.8% gain China recorded for retail sales growth in June 2019.
Electricity production, an oft-watched metric of China's real economic activity, was up +6.5% in June from the same month a year ago and that is a fast rising trend and the fastest growth in more than a year.
But China's own reporting of industrial production shows it rising +4.8% year on year in June and marginally better than analysts were expecting.
All this rush of data is in support their Q2 GDP result, which claims growth of 3.2% and better than the +2.5% expected. It is certainly a solid recovery from the Q1 decline of -6.8%. It's not quite the V-recovery they are claiming and that will have to wait for Q3. However, it is perhaps going to be just a limited recovery.
Foreign direct investment in China is still retrenching, despite their claims. It fell another -1.3% in June compounding the -3.8% fall in May.
In Australia, there are now almost 1 mln people unemployed and worse by 274,400 in a year. And that is despite its biggest monthly bounce back in jobs since records were kept. However, it wasn't enough to stop the unemployment rate rising to 7.4%. The rise in employment was dominated by +249,000 part-time jobs, while full-time work fell by -38,000. But the true picture is much worse, with joblessness that would be over 13% without Government subsidy programs. And that is why the official figure is set to keep getting worse, even if the reopening of the economy adds back jobs, because those support arrangements are due to be wound back - not to mention the new Victorian lockdowns and the risks of the same in NSW.
Wall Street is currently down -0.6% in early afternoon trade and shrinking the weekly gain to under +1%. Yesterday Shanghai fell very sharply (-4.5%), Hong Kong was also sharply lower (-2.0%) and Tokyo fell as well (-0.8%). Overnight European markets slipped about -0.5%. And yesterday the ASX200 ended down -0.7%%. The NZX50 ended down -0.9%.
The latest compilation of COVID-19 data is here. The global tally is 13,637,900 and that is up +241,000 since this time yesterday. Global deaths reported now exceed 586,000 (+6,000).
A quarter of all reported cases globally are in the US, which is up +71,500 overnight to 3,650,900. US deaths now exceed 140,000. The number of active infections in the US is now up +27,500 in a day to 1,854,200.
In Australia, there have now been 10,810 cases reported, another +315 since this time yesterday, and still concentrated in Victoria and NSW. Their death count is up to 113 (+2) and 30 people are now in ICU (+2). Their recovery rate has slipped back further to 74%. There are now 2661 active cases in Australia (up +205 in a day).
The UST 10yr yield is -2 bps softer at 0.61%. Their 2-10 curve is a little steeper at +47 bps. Their 1-5 curve is also a tad steeper at +13 bps, and their 3m-10yr curve at +50 bps. The Aussie Govt 10yr yield is down -1 bp to 0.88%. The China Govt 10yr is softer too, down -3 bps at 3.04%. And the NZ Govt 10 yr yield is down -2 bps at 0.93%.
The gold price is -US$17 lower today at US$1,795/oz.
Oil prices are a little softer today. They are now just under US$41/bbl in the US and the international price is just under US$43.50/bbl.
And the Kiwi dollar is softer by nearly -½c at just on 65.3 USc. We are little-changed at 93.7 AUc. Against the euro we have slipped slightly to 57.4 euro cents. That means our TWI-5 is down to 69.8 and where it was two weeks ago.
The bitcoin price is softer by -0.9% at US$9,133 and also near a two week low. 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 ».
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