Here's our summary of key economic events overnight that affect New Zealand with news financial markets have virtually dismissed Omicron threats now.
But first, US jobless claims spiked last week but in a seasonal pattern, and if you look past that they remain low, and lower than pre-pandemic. On that basis they are at a 50 year low. There are still less than 2 mln people on these benefits and the lower trend is still in place. Last week's levels were about what analysts were expecting.
The widely-watched USDA WASDE report is now suggesting that the world wheat harvest will be better than previously indicated - and wheat prices slipped. But despite upward revisions to global stocks this month, they are still at a 5-year low. The same report suggests the US will be importing more beef at higher prices, and that US dairy production is slipping and prices are rising.
The one part of consumer spending that has delivered lower prices consistently has been online shopping, which is one reason it has boomed recently. In the US now one dollar of every four is spent online. But for the first time since it has been tracked starting in 2014, online prices are rising fast, up +3.5% in the past year and extending the rises to 18 straight months. The supply-chain pressures are building inflation everywhere now.
And it is not just a problem for urban consumers. Soaring energy prices make fertiliser more expensive and farmers globally are scrambling for organic manure, including biosolids. There's money in muck.
Meanwhile, in the financial world, the Fed is reporting that US household wealth rose to a record US$144.7 tln at the end of the third quarter, though the +$2.4 tln gain over the period was the smallest since the rebound from the pandemic began.
China's consumer prices rose in November by 2.3%, and up from 1.5% in October and its highest in a year. It was led by rising pork prices although beef, lamb and milk prices all remain well contained.
China's producer prices remained very high in November, up +12.9% in a year, but there was actually no rise from October. Still they are at record modern highs.
In China's financial markets, loan growth is slowing. Their new yuan loan growth was expected to bounce back in November from the unusually low October level, and they did. But the bounce back was far less than expected and embeds the declining trend evident in 2021. Beijing can 'force' banks to lend, but it can't 'force' businesses to borrow. The central bank also raised its foreign exchange reserve ratio overnight, trying to dampen the yuan's recent surge. The Chinese central bank has never been 'independent' but Beijing Party officials are exerting closer control these days.
And staying in Australia, pandemic cases in Victoria jumped to 1230 reported yesterday. There are now 11,224 active cases in the state - and there were another 9 deaths yesterday. In NSW there were another 420 new community cases reported yesterday, another jump, with 3,372 active locally acquired cases, and no deaths. Queensland is reporting no new cases. The ACT has 4 new cases. Overall in Australia, just over 88% of eligible Aussies are fully vaccinated, plus a bit under 5% have now had one shot so far.
The UST 10yr yield opens today at 1.50% and retracing -2 bps overnight. The UST 2-10 rate curve starts today a little flatter at +81 bps. Their 1-5 curve is little-changed at +89 bps, while their 3m-10 year curve is flatter at +146 bps. The Australian Govt ten year benchmark rate has fallen -3 bps to 1.66%. The China Govt ten year bond is unchanged 2.88%. The New Zealand Govt ten year is firmer, up +6 bps at 2.45%.
On Wall Street, the S&P500 has started their Thursday session down -0.3%. Overnight, European markets all fell about -0.3% as well. Yesterday Tokyo ended -0.5% lower, but Hong Kong was up +1.1%, and Shanghai closed up +1.0%. The ASX200 closed down -0.3% while the NZX50 fell -0.8%.
We should also note that equity market reactions to the series of pandemic shocks are becoming shorter and less severe.
The price of gold will start today at US$1777/oz and down -US$5 overnight.
And oil prices are about -US$1.50 lower at just over US$71/bbl in the US, while the international Brent price is down to just over US$74.50/bbl.
The Kiwi dollar opens today weaker at 67.8 USc. Against the Australian dollar however we are down at 94.9 AUc. Against the euro we are unchanged at 60.1 euro cents. That our TWI-5 starts today lower at 72.3. We should also note that the Chinese yuan rose to another 3 year high against the USD as the Chinese central bank has stopped intervening in this market - for now at least.
The bitcoin price has slipped to US$48,671 and down another -3.4% from this time yesterday. Volatility over the past 24 hours has been moderate at just over +/- 2.9%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».