Here's our summary of key economic events overnight that affect New Zealand, with news nothing good is happening.
The American level of new jobless claims has skyrocketed to just under 300,000 last week, up from 211,000 the previous week. This will just be the start and is an early warning of what is about to happen to employment there. And pain will rise as continuing claims actually fell, meaning more people had their jobless benefits end last week.
Already, the US is seeing a surge in foreclosures and evictions in their housing market.
The next regional factory survey is out from the Pennsylvania manufacturing heartland and it is not good. It reported a dive in new orders.
Data for the US 2019 current account was released overnight and their deficit widened somewhat. But as a proportion of US GDP, it is -2.3%, and down from -2.4% in 2018.
On Wall Street, a minor rally is being attempted, with the S&P500 up +1.8%, but that really only embeds the recent very sharp falls. Since the start of March the S&P500 is down -18% and since the start of 2020 it is down -24% keeping it firmly in a strong bear market.
At least in China, there seems to be more movement in getting significant parts of their country back to work. Fear of reinfection runs high however.
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Around the world, governments and central banks are all announcing "whatever it takes" policies. The ECB promised at least €¾ tln in euro support. The US Fed was already in for US$1½ tln and the US Government is in for at least US$1 tln. Australia chipped in yesterday with at least AU$100 bln. These are already enormous levels of financial support, all within the past few days, and all vastly higher than for the whole GFC. More debt and more money printing hardly seems a long term answer. These huge short term band-aids will undoubtedly grow substantially from here. And just what will the global financial system look like when the virus emergency wanes, as it undoubtedly will? Massive debt cancellation will have to be on the table, surely.
Around the world, tax revenues are about to plunge just at the time public debt is about to soar.
And this crisis may in fact spell the end of cash notes and coins in retail transactions, except for hoarding.
The latest compilation of Covid-19 data is here. The global tally is now 229,000 of officially confirmed cases and rising by the hour now, up +80% in a week. There are now 148,000 cases outside China and European cases now exceed the Chinese cases. The Chinese recovery rate is up to 87%. The American explosion continues, with total cases over 10,000 and they are up 105% in one day. Ironically, the Americans are advising against overseas travel but it is destinations who are most at risk from travelling Americans. Spanish cases are also still rising very fast, up +54% in one day. The number of confirmed infections is also up +50% in a day in Australia. The global official death toll now is now well over 9000 and will undoubtedly exceed 10,000 early in the weekend. More people have now died in Italy from coronavirus than have died in China. New Zealand has eight new cases of Covid-19, all overseas travel related and bringing the total to 28. Our borders are now shut.
In Australia, Qantas and Jetstar have cancelled all international flights; only rescue mission to repatriate citizens will now be flown.
And yesterday we should note that Aussie jobs growth was strong in February. But no-one thinks this will continue much longer.
The UST 10yr yield hasn't been able to hold yesterday's sharp rise, down -13 bps and now at 1.07%. With sharply higher long-term risks, investors want to be paid better, even for benchmark bonds. Rate curves are still sharply positive as short pricing stays very depressed. Their 2-10 curve is staying up there at +71 bps. Their 1-5 curve is a little less positive at +46 bps. while their 3m-10yr curve is still out there at +103 bps. Most other government bond yields have retraced today too. The Aussie Govt 10yr yield is down -8 bps now at 1.30%. But the China Govt 10yr is up +1 bp at 2.79%. And the NZ Govt 10 yr yield isn't following the international trend yet, up sharply again and now at 1.77% with another+30 bps rise in a day.
Gold is down -US$14 to US$1,472 today.
But US oil prices have bounced back sharply today, up almost +US5/bbl to just over US$25/bbl with the Brent benchmark just over US$28/bbl. Volatility is sure to become normal in commodity pricing now.
The Kiwi dollar starting today with a recovery from yesterday's pummeling. It is up ½c to 58.2 USc - still, we are still near an eleven year low. On the cross rates however we are little-changed at 99.4 AUc. Against the euro we are also sharply higher that yesterday's low at 54.5 euro cents. That means our TWI-5 is now just over 66.
Bitcoin has leapt higher today, now at US$6,195 and an +18% jump from 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 ».