Here's our summary of key economic events overnight that affect New Zealand with news of rising frustrations in China.
But first, we get the May American non-farm payrolls report tomorrow and analysts expect it to rise by +325,000 jobs. But today, the precursor ADP Employment Report only signaled +128,000 new jobs, and if the non-farm payrolls report comes in like that, it will be statistically disappointing.
The latest job cuts report delivered historically low levels. But for technology, fintech, construction, and the car industries, these all reported jumps in layoffs.
New US jobless claims came in at 182,000 and less than expected. There are now 1.26 mln people on these programs, yet another record low.
April factory orders rose, but not by as much as was anticipated. But they were up almost +13% from the same month a year ago.
US central bank officials were out speaking overnight, and all had the message that steep +50 bps policy rate hikes might be needed for longer than originally indicated, perhaps through to September.
And separately but related, an overnight New York meeting observed that digital money, a curiosity just a few years ago, is emerging as an intense concern among central banks with the potential to erode the power of monetary policy, and even in the best of worlds, likely to make control of interest rates more difficult.
Canadian residential building permits fell in April when a rise was expected.
In China, we should keep an eye on Premier Li's fortunes. There is historical precedent for a CCP deputy trying to fix a leaders mistakes, and in that earlier case it didn't end well for the deputy. The backdrop is that officials aren't seeing things turning any better on the economic front. Li is aggressively urging remedies.
All that talk has boosted copper prices in anticipation of vast new infrastructure stimulus (but iron ore not so much).
And in Shanghai, frustrations are building. As officials declare 'victory' over the pandemic, lockdowns persist for millions, and frustrations are rising fast causing protests and arrests.
In India, the monsoon has arrived a little earlier than usual in the south. That will be good news for rice production there especially, and possibly help keep a lid on food prices.
In Europe, there are signs that the extreme rises in their producer prices might be topping out in April from March. But there are still up savagely on a year-on-year basis led by German costs and restrained by French costs.
Australia has booked yet another AU$10+ bln monthly trade surplus in April, continuing a long run of these fat surpluses. That takes the annual surplus to +$129 bln, a record high for any 12 month period.
The UST 10yr yield will start today down -2 bps at 2.92%. The UST 2-10 rate curve is marginally flatter at +27 bps and their 1-5 curve is flatter too at +78 bps. Their 30 day-10yr curve is also flatter at +214 bps. The Australian ten year bond is now at 3.51% and up +2 bps. The China Govt ten year bond is little-changed at 2.82%. And the New Zealand Govt ten year will start today up +3 bps at 3.64%.
Wall Street is higher today with the S&P500 up a strong +1.3% in late Thursday trade. But despite that, this index has had its worst start to any year through May since 1970, not an encouraging benchmark. Overnight European markets all rose by +1.0% or more except London which is on a two day holiday. Yesterday Tokyo ended with a -0.2% slip. Hong Kong was fell -1.0%. Shanghai ended up +0.4% with a late rally. The ASX200 ended its Thursday session down -0.8% while the NZX50 fell -0.2% in its session.
The price of gold is up +US$23 today at US$1869/oz. Silver is up a similar proportion.
And oil prices are again firmer from this time yesterday, up +US$1 to just on US$115.50/bbl in the US, while the international Brent price is up at just under US$117.50/bbl.
The Kiwi dollar will open today up almost +¾c at 65.6 USc. Against the Australian dollar we are unchanged at 90.3 AUc. Against the euro we are a little firmer at 61 euro cents. That all means our TWI-5 starts today at 72.3 and a one-month high.
The bitcoin price has risen a fractional +0.1% since this time yesterday and is now at US$30,214. Volatility over the past 24 hours has been modest at +/- 1.8%. Meanwhile, the Winklevoss crypto whales are being sued by the US Commodity Futures Trading Commission for lying on their filings.
It is a public holiday in New Zealand on Monday, and this review will return on Tuesday.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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