Here's our summary of key economic events overnight that affect New Zealand, with news investors are wondering where they are at after the sharp falls of the past few days.
Wall Street has made a half-hearted attempt today to stage a recovery. The S&P500 opened up a strong +3.6% but then lost all that gain by midday. Since it has managed to restore +0.6% of it, in whippy trading. They followed overnight European trading which wasn't positive at all, ending down about -1.5% in most markets. Yesterday Asian markets all closed higher however, with Shanghai up +1.8%, Hong Kong up +1.4% and Tokyo returning to positive territory, up +0.9% on the day. The ASX200 was up a very positive +3.1% at the close, but the NZX50 Capital Index closed down -1.8% in a very risk-off session.
There isn't a specific trigger for the rises, but investors seemed to have pinned their hopes on policy easing by major central banks and fiscal authorities. And disappointment on these fronts might well see the negative trends return, and fiercely.
In Italy, the country battling the worst Covid-19 outbreak outside of China, their economy minister has announced, somewhat informally, that mortgage payments will be suspended for households and SMEs. It is a policy measure they have used in other crises. But interest still accrues during the 'holiday'.
The latest compilation of Covid-19 data is here. The global tally is now 116,600 of officially confirmed cases, up +25% in a week. China's cases are up only ½% in a week. Cases in South Korea, Iran and Italy are up +140% in a week, but that growth is slowing in South Korea. The number of cases in the rest of the world have quadrupled in a week. Forget South Korea, Iran and Italy - the real explosion in cases is now occurring world-wide. And the new hotspots are now Spain, France, Germany and the USA, each with more than 1000 cases, up from just a few dozen a week ago.
Data on China's struggles to get back to work just keeps on coming. Their busiest coal railway saw freight volume drop -25% for a fourth consecutive month in February on very weak demand.
But while economic activity remains very subdued in the Middle Kingdom, consumer prices, especially food prices, are still rising fast. They were up an overall +5.2% in February with food up +16% year-on-year. Pork has more than doubled in price in a year while beef is up +21% and lamb +11%. The pain only affects consumers; producer prices were flat in February, marginally lower.
In Australia, consumer confidence is waning. Well, waning may be underselling it - it has fallen rather sharply. Aussie business confidence is heading south as well. This revealed negative sentiment following their Bush fires - and has yet to factor in the coronavirus impacts.
New Zealand business confidence falls are also being recorded, and the change lower has been described as 'awful'. This New Zealand survey is catching coronavirus signals.
The UST 10yr yield is now at 0.68% and recovering all of yesterday's steep decline. The American rate curves are now all positive for the first time in a while. Their 2-10 curve is more positive at +16 bps. Their 1-5 curve is little-changed at +19 bps. and their 3m-10yr curve has turned positive, now +9 bps. The Aussie Govt 10yr is up +9 bps overnight to 0.73%. The China Govt 10yr now at 2.68% and also up +9 bps. The NZ Govt 10 yr is up +7 bps at 0.92%.
Gold is sharply lower today, down -US$15 to US$1,655/oz.
US oil prices are still very low but have bounced up off Monday's depths, up +US$1 to just under US$34/bbl and the Brent benchmark has bounced a little more to be just under US$37.50/bbl. The private oil industry and support sector is now on its knees.
The Kiwi dollar will start today reversing yesterday's gains, down -1¼c to 62.5 USc. The greenback is recovering. On the cross rates we are up to 96.6 AUc. Against the euro we little-changed at 55.3 euro cents. That means our TWI-5 is now at 67.5.
Bitcoin is firm and less volatile today and up +0.9% to US$7,861. Other cryptos have posted bigger recoveries. 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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