Here's our summary of key economic events overnight that affect New Zealand, with news policymakers are throwing much more money into the economy rather than into the virus fight.
But first up today there was a dairy auction overnight and prices in US dollars fell -3.9%. At the same time, the US dollar rose against most others so in New Zealand dollars the overall result was a gain of +1.2%. In the circumstances, this has been a successful event with price rises for every commodity except SMP (-8.1%) and WMP (-4.2%). Volumes sold were +10% higher than at the same time last year. The automatic stabiliser of a floating exchange rate did its job today. Although prices are soft today, in local currency they are in the same broad range they have been for more than a year and it seems unlikely today's result will change any payout forecasts. Fonterra will give its update later this morning when it releases its half year results.
On Wall Street, markets are still yo-yoing, up today with the S&P500 currently up +5% and falling after being up +7% earlier. This market can't decide on a direction today, despite the American promises of more stimulus (over an above the Fed's huge promise already announced).
Earlier in Europe, equity prices rose by about +2.5% in most markets. Yesterday, Asian prices were up variable, but the ASX200 had a big bounce, up +5.8% on the US Futures indication Wall Street would rally strongly. They may re-think that today.
American retail sales for February came in weaker than analysts were expecting, decreasing -0.5% from January when a +0.4% gain was expected.
And US industrial production in February was unchanged in a year, but factory production was down -0.4% in a year. Only oil production, oddly, kept the overall level from declining too.
The White House proposes sending US$1000 to everyone (cost US$300 bln) with another US$½ tln as handouts to businesses. Socialism is alive and well in the US, so long as it's for business.
In Europe, the widely-watched ZEW survey shows economic sentiment collapsing in March in a very grim result.
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In China, there are more signs of improvement. House sales are rebounding in March after being frozen in February. And now 85% of China's confirmed coronavirus cases have officially recovered.
The latest compilation of Covid-19 data is here. The global tally is now 190,100 of officially confirmed cases, up +60% in a week. There are now 109,000 cases outside China. Four European countries account for more than half that; Italy (27,980), Spain (11.309), Germany (8604) and France (6664). Also rising very fast is the USA (5204) which is up +27% in just one day. The global official death toll now exceeds 7500.
In Australia, there are warnings there construction industry is about to buckle in the crisis. Retailers are approaching landlords en masse for rent relief. And airlines there say they will collapse within weeks without some sort of bailout. Australia seems to be heading for a very serious spread of the virus. They are already our largest threat of infection here.
The UST 10yr yield is higher today, up almost +14 bps from yesterday and now at 0.86%. Rate curves are still sharply positive as short pricing collapses. Their 2-10 curve is a little more positive at +48 bps. Their 1-5 curve has also turned more positive at +29 bps. while their 3m-10yr curve has ballooned out at +77 bps. The Aussie Govt 10yr yield is up +4 bps now at 1.06%. The China Govt 10yr is up +1 bp at 2.75%. The NZ Govt 10 yr yield is also very sharply higher, now at 1.25% and up +24 bps in a day.
Gold is yo-yoing as well, up +$27 today to US$1,530/oz.
US oil prices have dropped again today, down another -US$1/bbl to just under US$28/bbl with the Brent benchmark just on US$29. Vanishing demand as major economies shutdown can't seem to be stopped.
The Kiwi dollar starting today lower as the greenback firms sharply. It is now at 59.8 USc, down more than -1c in a day. On the cross rates however we are now at 99.6 AUc and close to its all time modern high and very near parity. Against the euro we are only marginally softer at 54.4 euro cents. That means our TWI-5 is now at 66.6.
Bitcoin, like gold, is also firmer, up to US$5,370, a rise of +7.1% since this time yesterday. 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 ».