Here's our summary of key economic events over the weekend that affect New Zealand with news the grand permissive let-it-rip Omicron experiment seems to be backfiring in Australia.
ANZ says spending in Sydney and Melbourne is now near levels typical of lockdown conditions. Indeed, total ANZ-observed spending in Sydney is at its lowest point since COVID began, they say. Caution about being in public places is being compounded by staff shortages which is stifling spending across dining, retail and travel. Dining spending in Queensland and Western Australia resembles previous lockdown conditions.
Now their Treasurer has tested positive and is locked in self isolation. A number of State politicians are too.
In NSW, there were 30,062 new community cases reported yesterday, similar to the day before, now with 292,237 active locally-acquired cases (and undoubtedly an undercount), and 16 more deaths. NSW hospitals face critical staff shortages, and they have been told the number of COVID-positive people needing inpatient care could exceed 4500 within a month. They are already at 1,927. 22,104 pandemic cases in Victoria were reported yesterday, similar to the day before. There are now 83,993 active cases in that state - and there were more 4 deaths. Queensland is reporting 18,000 new cases but no new deaths. In South Australia, new cases have risen to 4274 yesterday with 5 deaths. The ACT has 1039 new cases and Tasmania 1406 new cases. Overall in Australia, 77,020 new cases were reported yesterday and their hospitalisation rates are now above peak Delta levels in some states. NSW is limiting hospital and nightclub admissions to preserve their pandemic-fighting capacity. Supermarkets are reporting more than 20% of their staff are calling in sick. Doctors say the peak won't arrive until later in the month.
It is not only Australia struggling with a permissive policy response to the pandemic. We all know about the US and the UK's public health failures, but Sweden is another under significant hospitalisation pressure.
In the US, non-farm payrolls rose only +199,000 in December in a disappointing result, half the gain that was expected. Although these payrolls are now +6.5 mln higher than year-ago levels, they are still but still -2.7 mln lower than the pre-pandemic December level (-3 mln lower on a seasonally adjusted basis).
A lack of available workers is getting the blame.
There are some positives however; their jobless rate fell to 3.9% which is better than expected. Their participation rate didn't change at 61.9%. And their average hourly earnings rose +4.7% which was more than expected. Average weekly earnings also rose +4.7%.
The US Fed will probably feel the pressure of the fall in the jobless rate and the rise in wages, even if the labour market growth is less than anticipated.
US consumer credit rose at twice the rate expected in November (although the October rise was revised down marginally). It expanded by +US$40 bln in the month, the largest monthly rise in more than ten years (and ever, if you look past some one-off statistical corrections in both 2005 and 2010). The big impetus for this growth was primarily from bank lending, rather than from the non-bank sectors.
Canada's labour market improved more than expected. There was a +123,000 jump in full-time employment and a -68,000 drop in part-time employment, pushing their jobless rate down to 5.9%. Canada's participation rate is 65.3% and unchanged. However, average hourly earnings only rose +2.7% there. Overall, these results probably also bolster the case for a Canadian rate hike 'soon'.
China's foreign exchange reserves rose marginally in December to US$3.25 tln. But it caps a year of rises taking them to their highest since the end of 2015. But recall they touched US$4 tln in late 2014, so they are still a long way below that.
Taiwan's export growth is slowing marginally, but it is still running +23% above year-ago levels.
An ECB manager says she sees higher energy costs embedding for the medium term as carbon taxes and the green energy transition do their thing. And for her, that means raising interest rate sooner so that energy inflation doesn't create 'energy poverty'.
The UST 10yr yield opens today at 1.77% and unchanged since Saturday. The UST 2-10 rate curve starts today marginally flatter at +89 bps. Their 1-5 curve is unchanged at +108 bps, while their 3m-10 year curve is little-changed at +171 bps. The Australian Govt ten year benchmark rate is unchanged at 1.87%. The China Govt ten year bond is also unchanged at 2.84%. The New Zealand Govt ten year is unchanged as well at 2.46%.
The price of gold started today at US$1797/oz and unchanged since Saturday.
And oil prices start today unchanged at just over US$78.50/bbl in the US, while the international Brent price is now just over US$81.50/bbl.
The Kiwi dollar opens today unchanged at 67.8 USc. Against the Australian dollar we are marginally firmer at 94.5 AUc. Against the euro we are little-changed at 59.7 euro cents. That means our TWI-5 starts the today unchanged at 72.3.
The bitcoin price has changed little since this time Saturday, up +0.6% to US$42,075. Volatility over the past 24 hours has been moderate however at +/- 2.2%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».