Here's our summary of key economic events overnight that affect New Zealand, with news of some major and some weird economic crisis effects.
First in the US, another +5 mln people applied for unemployment insurance. That brings the four-week total to over +22 mln. Given they had a labour force of 163 mln at the start of March, that translates into an unemployment rate of 18% now, and you probably have to add to it many millions who don't qualify for unemployment benefits. On top of those of course there are millions who have taken pay cuts and reduced hours. The resulting consumer demand shock will be terrible. And after all that, we are overlooking their low participation rate (62.7%) which means they started with at least 19 mln adults who had previously given up on being in their labour force. Taking it all into account, that is a 'real' jobless rate of 26% now. All up, it is ugly. Oh, there's more - workers in the gig economy are uncovered by any of these stats and are also out in the cold.
Official help for American SMEs under an emergency $350 bln program has stopped - because it has committed all the money allocated.
For many individuals, they won't be able to access their stimulus funds paid by cheque, because if they were overdrawn in their account in the emergency, banks are applying the funds to the overdrawn balances.
Another social trend in the US is that climate change deniers are now morphing into Covid-19 deniers. Rallies are being held demanding the economy be reopened "because the risk is overstated". They are part of a broader "Ostrich Alliance" of dictators pretending there is some sort of big international conspiracy over the pandemic. This group includes Brazil, Belarus, Nicaragua and Turkmenistan.
In China, a new report shows the number of job ads recorded a steep drop in the first quarter of 2020, but the figure for the March period wasn’t quite as dire as that for the first two months, indicating a minor recovery across their economy may be underway as the impact of the pandemic eased.
Japan is disbursing NZ$1500 to everyone to assist with the economic effects of the economic slowdown, the latest country to deploy helicopter money.
In Germany, factories there are starting to resume production as their virus control measures seem to be successful. There is also a partial opening of shops and schools too.
In Australia, their March jobless numbers rose marginally in advance of the pandemic slowdown. And in a shameful move, the Crown Casino group have paid a huge NZ$215 mln dividend to shareholders and then left the taxpayer to foot the bill for the 11,500 staff it has laid off. That dividend is equivalent to NZ$20,000 per laid-off employee.
Meanwhile in equity markets, the S&P500 is little-changed today, and similar results were posted in Europe and Asia earlier.
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,101,200 and up +85,000 this time yesterday which is a faster rising tide. Now, 31% of all cases globally are in the US and they are up +28,000 since yesterday to 641,200. This is an unchanged level of increase. The level of US cases that have recovered is unchanged at 8%. Australia's infections and deaths have stalled at 6400. Their recovery rate is marginally higher at 36%. But there are serious doubts about the veracity of Australia's reported data.
Global deaths now exceed 141,000, 22% of them in the US, a rise, and 51% of them in the four core European countries - Spain, UK, Italy and France, a fall.
There are now 1401 Covid-19 cases identified in New Zealand, with another +15 new cases yesterday and less than the +20 increase the day before. The number of clusters is still at 16. Nine people have died here now, unchanged. There are now 12 people in hospital with the disease, with three in ICU. Our recovery rate is now up to 55% and rising quickly.
In money markets, the UST 10yr yield has fallen again, this time by another -3 bps to just 0.60%. Their 2-10 curve is flatter today at +41 bps. Their 1-5 curve is little-changed at +17 bps, and their 3m-10yr curve is also unchanged at +51 bps. The Aussie Govt 10yr yield is now at 0.81% and down marginally overnight. The China Govt 10yr is at 2.53% and down -2 bps overnight. The NZ Govt 10 yr yield is lower too, down -7 bps to 0.94% in international trading.
Gold has moved back down again, down another -US$12 to US$1,709/oz.
US oil prices are a softer again today and now under US$20/bbl. The Brent benchmark has dropped too, to under US$27.50/bbl.
The Kiwi dollar will open almost -½c lower at 59.5 USc. On the cross rates we are lower too at 94.5 AUc, while against the euro we are soft at 54.8 euro cents. That means the TWI-5 will start today at 65.7.
Bitcoin is now at US$7,015, up +3.2% 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 ».
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