Here's our summary of key economic events overnight that affect New Zealand, with news that if you are already shell-shocked from relentless bad economic news, don't read any further.
The data out of the world's largest economy is getting worse, as expected, but it is blowing by analysts expectations which have already been set very low.
First, retail sales in March were worse than feared and February data was revised lower.
So it is no surprise that the NY Fed's business survey in the powerhouse Northeast region was grim - only that it was far grimmer than expected and far, far worse that what was recorded in the GFC.
And the US Fed's Beige Book reported economic activity contracted sharply and abruptly across the whole country with perhaps that New York report the worst. All districts reported loan demand was high, both from companies accessing credit lines and from households refinancing mortgages.
In fact the latest data shows mortgage applications up +7% in just one week as homeowners start to tap their equity to weather the crisis. That can only last as long as house prices hold, and they are unlikely to given the huge surge in layoffs and joblessness.
Unsurprisingly, all this data, much of it only for March, paints a picture of an economy under enormous stress. The snippets of April data out already paint a far worse picture.
The Bank of Canada issued its latest Monetary Policy review and held its rate at 0.25%. It also announced a large money printing program to shore up both Federal bonds and Provincial bond programs.
China has cut its one-year medium-term lending facility by -20 bps to 2.95%, releasing NZ$22 bln into their economy in extra banking system stimulus.
China will release its Q1 2020 GDP data later tomorrow and it is expected to be very weak. The +6.0% year-on-year growth in Q4-2019 is expected to be a -6% contraction in Q1-2020. The policy responses at the same time will be watched closely.
Iron ore prices are holding higher in anticipation of massive Chinese stimulus announcements. Chinese actions probably can't save the world, but they will be important for both Australia and New Zealand.
In Australia, the latest consumer sentiment survey shows a very sharp plunge, deeper than for the GFC. Some key sectors like retail are pushing hard for official signals that they can re-open.
Meanwhile, one respected analyst (UBS) says Aussie house prices could fall by -10% or more, while new housing starts could drop to a level not seen since the 1960s. Their whole real estate market is in turmoil.
Equities are down -2% in New York today so far. They were down more in Europe overnight, and fell in Asia yesterday too. The NZX50 Capital Index rise of +2.5% was a complete outlier on the global stage.
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,016,100 and up +46,000 this time yesterday which is a slower rising tide. That is a doubling of cases in just two weeks. Now, more than 30% of all cases globally are in the US and they are up +29,000 since yesterday to 613,200. This is a slightly faster rate of increase. The level of US cases that have recovered has crept up to 8%. Australia's infections and deaths have stalled. Their recovery rate is also unchanged at 34%.
Global deaths now exceed 131,000, 20% of them in the US and 52% of them in the four core European countries - Spain, UK, Italy and France.
There are now 1386 Covid-19 cases identified in New Zealand, with another +20 new cases yesterday and more than the +17 increase the day before. The number of clusters is up to 16. Nine people have died here now. There are now 13 people in hospital with the disease today, with three in ICU. Our recovery rate is now up to 52% and rising fast.
In money markets, the UST 10yr yield has fallen to just 0.64% and a -10 bps retreat since this time yesterday (the record low was 0.32% on March 10). Their 2-10 curve is flatter today at +45 bps. Their 1-5 curve is also flatter at +15 bps, and their 3m-10yr curve is flatter too at +51 bps. The Aussie Govt 10yr yield is now at 0.82% and down a very chunky -12 bps overnight. The China Govt 10yr is at 2.55% and virtually unchanged overnight. The NZ Govt 10 yr yield has gone the other way, up +4 bps to 1.01%.
Gold has moved back down today, down -US$16 to US$1,721/oz.
US oil prices are a softer again today at just on US$20/bbl. The Brent benchmark has dropped harder, down -US$1.50 to US$28/bbl. And that is after the US purchased 19 mln barrels for their strategic reserve, an action which probably stopped the price from falling further.
The Kiwi dollar will open almost -1c lower at 60 USc. On the cross rates we are unchanged at 94.7 AUc after yesterday's fall, while against the euro we are down another -½c at 55 euro cents. That means the TWI-5 will start today at 66 and wiping out all the rises over the past two weeks.
Bitcoin is now at US$6,762 and down -2.4% up 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 ».