Here's our summary of key economic events overnight that affect New Zealand, with news we are entering a split world where joblessness explodes but share prices rise strongly.
The American Congress has agreed to a US$2 tln aid bill, 10% of GDP and will vote on it soon with the President expected to sign it. It is the largest fiscal support package ever but may only be the start of what is needed, especially as the American infection rate seems sure to climb sharply from here. Much of the crucial aid to individuals will only trickle out slowly it seems (helicopter money of about US$1,200 to qualified claimants), with aid to companies much faster (and including the President's own companies). So many American workers are suddenly applying for unemployment benefits, many State systems taking their applications can't handle the load, causing further delays in support.
And the Federal Administration’s decision to move the deadline for filing income taxes from April 15 to July 15 is creating a cash crunch for state governments that were counting on an infusion revenue next month to pay bills like unemployment benefits. States can't print money and may need to be bailed out themselves, creating another massive surge in Federal aid.
Research from the St Louis Federal Reserve suggests that almost half of all the American workforce could lose their jobs due to restrictions implemented to battle the virus.
Ignoring these concerns, Wall Street is in a relief rally now that the stimulus package has been agreed and will pass. The S&P500 is up another +4% on top of yesterday's very strong +9% rise. Gains on European and Asian markets were similar yesterday.
In Canada, their support payments are to be about C$2,500 each, per month, to claimants.
In Europe, Germany has approved a €156 bln rescue package, equivalent to half of the country’s normal annual government spending. But, typically German, that only amounts to about 5% of GDP and about half the levels of fiscal stimulus other governments are enacting.
In China, they are starting to buy again on international markets, especially grain, oil and gas. It turns out to be a great time for them to re-enter these markets because prices are at rock-bottom. And their industrial heartland is showing more life as firms restart operations.
In Australia, they are moving toward a broader shutdown as virus cases surge. Arguments are building over landlord financial returns from a rent freeze, and the number of jobless workers surge each passing day.
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There are now more than 205 cases identified in New Zealand, with more than 50 new cases in the past 24 hours, including community transfer. Our officials now expect our caseload to rise into the thousands before we gain control. Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 441,000 of officially confirmed cases, more than doubling in a week. There are now 360,000 cases outside China and almost all of them are in five core countries. Italy is up +5000 from just yesterday morning's tally. The US is up +9,000 cases from the same time and now at 56,000 cases. The caseload is rising so fast there that later this week we will probably report that the US is the world's epicenter of the global outbreak, surpassing China which seems to have things under control for now. And Switzerland now has more cases than South Korea, up to 10,500 of them. Both Italy and Spain have had more deaths than China now. Sadly however, case numbers in the rest of the world are shooting up, up +90% overnight to over 91,000. Australia now has 2364 cases, a rise of five times in a week. The official death toll is about to hit 20,000 worldwide, but is probably much higher - as is the real infection rate.
The UST 10yr yield is softish today at 0.81% but in-between it has been volatile. Their 2-10 curve is still very positive at +47 bps and unchanged. Their 1-5 curve is more positive at +33 bps, while their 3m-10yr curve is still way out there at +86 bps. Short rates for UST bills have now turned negative. The Aussie Govt 10yr yield is now at 0.96% which is a net dip of -3 bps in a day. The China Govt 10yr is unchanged at 2.71%. The NZ Govt 10 yr yield had a massive dive yesterday, down -35 bps and now at 1.11%.
Gold is holding its price today, unchanged at US$1,614/oz.
US oil prices are up +US$1 today to US$24.50/bbl but the Brent benchmark is slightly lower at just over US$27/bbl.
The Kiwi dollar is starting today still firmer than this time yesterday at 58.2 USc. On the cross rates however we are unchanged at 97.6 AUc. Against the euro we are also unchanged at 53.7 euro cents. That means our TWI-5 is holding at 65.6 and its highest in more than a week.
Bitcoin is now up to US$6,702 which is a daily rise of less than +1%. 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 ».