Here's our summary of key economic events overnight that affect New Zealand with news there has been a huge change of mood in financial markets overnight.
Investors took heed of the new WHO warnings of the emerging South African variant that is probably resistant to current vaccines, and the early closing of borders again in response, and have reacted in a sharp risk-off manner globally.
Commodity prices, equity prices, and interest rates have all tanked substantially, and there has been a rush to the 'safety' of the core currencies. The NZD has not fared well.
Copper fell -3.6% in markets today to US$9465/tonne. Aluminium lost -4.2% to $2,601/tonne, zinc shed -3.1% to $3,197, lead was down -0.4% to $2,261, tin eased -0.5% to $38,600 while nickel ceded -3.7% to $19,895.
Oil prices sank much more, down -13% on the day (see below).
Countries including the US and the UK are weighing new travel restrictions. Two of these new Omicron (South African) cases have been detected in Hong Kong now, indicating broad travel spread already.
Meanwhile, at US ports, as containers of goods unload, a new logistics problem is emerging - how to handle the mountains of empty containers. The flow of full-container trade back to China is small by comparison, and the flush of imports for the holiday season is coming to an end. The numbers of empties is truly enormous, exceeding 100,000 and growing.
In China, news about the economic stress their economy is in is suddenly absent from their reporting. Even respected news sources are now featuring box-office 'successes' and dog-owner complaints. The sanitising is very noticeable.
Singaporean industrial production data for October showed an unexpected improvement.
In Germany, import prices surged +22% year-on-year in October, the largest annual increase in more than 40 years and well above market consensus of less than a +20% rise. These rises are largely driven by Russia energy prices, and given the political tussling between the EU and Russia, they may not fade like the rest of the world.
The Global Innovation Index pegs New Zealand still at #26 (unchanged) and Australia at #25 (and down from #23 last year). Switzerland, Sweden and the US were the first three. China was #12.
In Australia, retail sales jumped +4.9% in October as opening up generated a strong surge. But as ANZ economists have noted, their recovery is now "a supply side issue".
There are 5431 auctions set to hit the Australian real estate market this coming week - a new national record - but there is no sign the market is about to peak, SQM Research says.
In Australia, Delta cases in Victoria have risen again to 1362 cases reported there yesterday, its highest in November. There are now 10,887 active cases in the state - and there were another 7 deaths yesterday. In NSW there were another 261 new community cases reported yesterday, and a rise, with 2359 active locally acquired cases, and they had one death yesterday. Queensland is reporting zero new cases yet again. The ACT has 8 new cases again. Overall in Australia, just under 86% of eligible Aussies are fully vaccinated, plus a bit over 6% have now had one shot so far.
The UST 10yr yield opens today at 1.48% and down a massive -17 bps since this time yesterday. The US 2-10 rate curve starts today flatter at +97 bps. Their 1-5 curve is also flatter at just under +100 bps, while their 3m-10 year curve is very much flatter at +135 bps. The Australian Govt ten year benchmark rate is -20 bps lower at 1.66%. The China Govt ten year bond is down -3 bps at 2.88%. The New Zealand Govt ten year is down -6 bps at 2.47%.
NZ swaps rate reversed sharply yesterday as the concerns about the new virus risks started to become evident.
In New York, Wall Street has reopened after Thanksgiving and probably wish they hadn't. The S&P500 is down -2.3% at their early close at 1pm their time, taking the weekly drop to -2.4%. European markets all fell much harder, with London down -3.6% for the day (-2.5% for the week), Frankfurt down -4.2% (-5.8%) and Paris down -4.8% (-5.5%). This has been the worst week in 18 months for European equities. Yesterday, Tokyo was closed down up +2.5% for the day (-3.0% for the week), Hong Kong was down -2.7% (-3.9%) while Shanghai finished down -0.6% (flat). The ASX200 fell -1.7% (-1.6%) but these were all before while the NZX50 rose +0.2% yesterday.
The price of gold will start today down -US$4 at US$1786/oz and getting no boost from this risk-off dive.
And oil prices have dived almost -US$10/bbl at just over US$68.50/bbl in the US, while the international Brent price is now just under US$72/bbl. These retreats will have a big impact on both the consumer and producer price impulses.
The Kiwi dollar opens today softer again, down -40 bps at just under 68.2 USc and a new 100 day low. Against the Australian dollar we are firmish at 95.7 AUc. Against the euro we are sharply lower at 61.4 euro cents and down more than -¾c. That means our TWI-5 starts today at 72.9, down -60 bps and also its lowest since the end of September.
The bitcoin price has crashed -8.2% since this time yesterday, down to US$54,227. At that level it is down -6.3% in a week, down almost -12% since the start of the month. Volatility over the past 24 hours has been extreme at just over +/- 5.4%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».