Here's our summary of key economic events overnight that affect New Zealand, with news equity markets are trying to decide which way to go on the virus panic.
But first in the US, sales of new homes were up strongly, almost +19% higher in January than the same month a year ago. New home sales are much less than 10% of the residential market, but all the same, this was an impressive result. American home loan rates remain low and supportive of the real estate industry.
The latest compilation of Covid-19 data is here. There are now 3181 cases outside China, a rise of +250 since yesterday. South Korea and Italy are now the real hotspots. A week ago that number was 1097 so it has now almost trebled in one week.
Japan is also being hit with both the virus and the outsized economic contagion effects. Some think it will push Japan into recession. And the news gets even worse for Japan: an IOC official says the Olympics would be cancelled if the risks were too high, rather than moved.
Hong Kong's government is trying economic incentives to battle virus panic, offering a cash handout of HK$10,000 to every resident (about NZ$2,000), tax breaks and a raft of subsidies in a NZ$25 bln package (4% of GDP) aimed at easing the financial burden on citizens and injecting new life into an economy ravaged by months of social unrest and now pandemic fears. But it will see them book a huge and uncharacteristic -NZ$30 bln budget deficit in 2020.
In China, local governments have announced an eye-catching total of more than ¥11 tln in "investment", mostly in infrastructure projects, in an effort to boost the economy that has been hard hit. That is a startling NZ$2.5 tln in projects, worth more than 30% of Chinese GDP.
The stock market panic over the economic impacts is dividing into two camps. Asian and European markets are still showing signs of fear. Yesterday, Asian markets fell a further -0.8% while overnight EU markets slipped again too although they did show signs of stabilising at the close. Today, Wall Street has brushed aside fears and turned higher, and at one point recovering about half of yesterday's dump. But as the session rolls on some of those gains are being given up again. Update: It has slipped back into negative territory in afternoon trade.
In Australia, offical data reports large falls in construction completed in the December quarter. They were especially tough for residential building and came in larger than were expected.
The UST 10yr yield is little-changed from yesterday, now just on 1.33% and still at an all-time low. (Update: It has since slipped down to a new low of 1.31%.) Their 2-10 curve is still positive at +16 bps. Their 1-5 curve is less negative at -13 bps. but their 3m-10yr curve has shifted more negative at -26 bps. The Aussie Govt 10yr is holding at 0.90%. The China Govt 10yr now at 2.86% and also similar to yesterday. The NZ Govt 10 yr is now just under 1.20% and that is also very similar to yesterday's level.
Gold is down -US$5 to US$1,642/oz.
US oil prices are lower at just over US$49/bbl. The Brent benchmark is also lower at just on US$54/bbl. It is all driven by demand fears.
The Kiwi dollar starts today lower at 63 USc even. On the cross rates we are up to 96.1 AUc. Against the euro we are down to 57.9 euro cents and that's our weakest against the euro in three months. That means our TWI-5 has dropped below 69.1.
Bitcoin is now at US$8,735 which is another big -6.3% fall since this time yesterday and a -10% drop in a week. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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