Here's our summary of key economic events overnight that affect New Zealand, with news a moderation vibe is settling over the global economy, heralding a lackluster period ahead.
US jobless claims rose last week by +224,000 which was higher than expected and perhaps the start of the long-awaited labour market slowdown. There are now 1.9 mln people on these programs which is still low however, an insured unemployment rate of 1.3%. (NZ Jobseeker-to-labour force rate is 3.4%.)
In its final estimate for Q4-2022 GDP, the US reported that their economy expanded an annualised +2.6%, slightly less than initial estimates of a +2.7% rise. Consumer spending rose +1% and below the +1.4% in the second estimate, as spending on services advanced much less than initially assumed.
The Boston Fed President says she expects only one more +25 bps rate hike from the Fed in this cycle. In her view, inflation will continue to moderate, and there won't be a hard landing.
In Germany, their inflation rate is pulling back now too and as expected. It eased further to 7.4% from a year ago in March, down from 8.7% in the previous two months. Analysts were expecting a March rate of 7.3%. The actual rate was its lowest since August 2022. It peaked at 8.8% in October 2022. There is a downside however, the February to March increase ran at an annualisted rate just below +10%.
EU sentiment eased marginally in March to remain well below its long run average. It is consumers more than businesses that keep this measure low.
In Australia, job vacancies are slipping although are still at a relatively high level. However, this is the first quarterly decline since August 2021, so perhaps this data is telling us something.
The cost of containerised shipping freight fell another -2% last week to now be -36% lower than its ten year average, but still +21% above its pre-pandemic level. China-US rates fell the most, but there was a small uptick in China-EU rates which we haven't seen in a while. Freight rates for bulk cargoes were little-changed last week.
The UST 10yr yield starts today at 3.56%, unchanged from yesterday. The UST 2-10 rate curve is marginally more inverted at -55 bps. Their 1-5 curve inversion is greater at -95 bps. And their 30 day-10yr curve is very much more inverted at -92 bps. The Australian ten year bond is up +3 bps at 3.36%. The China Govt ten year bond is unchanged at 2.88%. And the New Zealand Govt ten year is starting today up at 4.25%. That is another +6 bps rise.
Wall Street is still on the up, with the S&P500 tracking a +0.3% rise in late Thursday trade. Overnight, European markets were all positive and up +1.2% except London which gained +0.7%. Yesterday Tokyo ended its Thursday session down -0.4%. But Hong Kong was up +0.6%, and Shanghai ended up +0.7%. The ASX200 ended up a +1.0%, and the NZX50 rose +1.7% in its Thursday trade with a final burst higher across most sectors.
The price of gold will open today at US$1983/oz and up +US$18 from this time yesterday.
And oil prices start today up +50 USc from yesterday at just on US$74/bbl in the US. The international Brent price is now just under US$78.50/bbl.
The Kiwi dollar is up nearly +½c against the USD and now at 62.6 USc. Against the Aussie we are firmish at 93.3 AUc. Against the euro we are little-changed at 57.4 euro cents. That means the TWI-5 is now at 70.4 with a +20 bps daily rise.
The bitcoin price is very little-changed today, now at US$28,257 and up less than +0.1% from this time yesterday. Volatility over the past 24 hours has been moderate however at +/-2.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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17 Comments
US jobless claims is totally manipulated data. You must be seeking work and no longer out of a job for 6 months. It takes 2 years of work before one may even apply for an unemployment benefit, that you have to have been paying into. Unemployment in the USA is closer to 20%. Homeless people, disabled veterans, college graduates seeking work, people given up on finding a job, part time workers just getting by, non are counted. Like any government program the data is either hidden or manipulated for their own benefit.
Not when the goalposts constantly shift. The UN is guilty of this too; definitions of poverty constantly morphing.
Our government does it too - there is no pathway to funding pension expectations, and the gap (between underwrite and heroic assumption) continues to widen. By default, that's a shifting goalpost.
"" the World Bank’s updated International Poverty Line is that, whilst the number has risen – from $1.90 to $2.15 per day – in terms of the goods and services that it affords, the value is broadly the same. This is because the units in which the old and new figures are counted have changed: the $1.90 figure was expressed in 2011 international-$, and the new figure of $2.15 is expressed in 2017 international-$. ........... broadly speaking, the difference in the two units reflects inflation over time: Because prices have gone up, one 2017 international-$ buys a smaller quantity of goods and services than one 2011 international-$. This leaves the real value of the revised International Poverty Line broadly equal to what it was before.""
PNG 25 years ago had 90% of its population living in small villages (<150 people) and mostly with no income. But they were healthy - only poor in money. Today many live in cities; they may have coins in their pockets; may have some access to the Internet; but are in extreme poverty.
I must confess that I'm a little confused : in 2018 the new Labour Government shut down National's roads of national significance programme : the 4 lane super highway linking Auckland to Whangerei , the Christchurch to Ashburton 4 laner , the Woodend bypass ... etc ... etc ... all consented , all " shovel ready " ...
... roads were deemed to be bad , only bicycles & public transport would suffice in the new world order of Ardern & Hipkins ...
But yesterday , knock me down with a feather , Hipkins & Wood announced a super duper ridgey didge brand new bridge &/or tunnel for Auckland .... $ 25 billion ... ummmm .... what changed their minds ?
In Germany, their inflation rate is pulling back now too and as expected. It eased further to 7.4% from a year ago in March, down from 8.7% in the previous two months
OOPS! Supermarket prices keep rising in Germany. German Food #inflation jumped 22.3% YoY in March, a fresh ATH since the start of the statistics, and up from 21.8% in February. Link
Over the last two years: - S&P total return including dividends: +5% - Total headline inflation, compounded: +15% In real terms, the S&P500 has underperformed inflation by 10%. Fun fact: the last big fiscal stimulus plan (= the real money printing) was dated...March 2021. Link
A relatively minor liquidation this one. Good ‘ole withholding of GST revenue from home sales.
When the slump truly arrives the fall away in GST revenue from new housing is really going to whack the government’s coffers.
https://www.nzherald.co.nz/business/irreconcilable-breakdown-sparked-wa…
Hold the presses , ed ... as we go to print , hot off the wires ... a grand jury in Manhatten USA has indicted former President , Donald Groper Trump ... Trumpy has made history as the first ever US President to be indicted of a crime ... it's getting stormy for the Don ...
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