Here's our summary of key economic events overnight that affect New Zealand, with news of a spectacular market collapse.
First up today, US oil prices have nosedived - in fact the market has completely collapsed and you can hardly give the stuff away today. Believe it or not prices are currently quoted at 50 USc/bbl. Yes you read that right, a fall of almost -US$18/bbl overnight. At one point, prices actually fell below zero. There is both no demand, and no place to store new crude. No-one is saying prices will stay this low, nor will be this low in the future. But right now there is no market for crude oil in the US, a stunning development. The Brent benchmark is down too, but there is still a functioning international market at just over US$26/bbl, down about -US$2/bbl. The US price situation is the most spectacular market collapse of a commodity ever; well, at least since tulips.
Staying in the US, their national economic activity index crashed in March and undoubtedly has fallen further in April. It is actually a very serious indicator of deep structural problems for the world's largest economy.
Japan's exports fell more than forecast in March, down almost -12% year-on-year when a -9% fall was expected and the February fall was only -1%. It is almost certain April exports will fall much harder.
China has cut -20 bps from its prime rate benchmark, taking the new rate down to 3.85%.
And China has announced a new huge NZ$250 bln infrastructure stimulus program to be operated through local governments.
Credit rating agency Fitch has cut Hong Kong's credit rating by one notch to AA as the city faces a resurgent virus and GDP that will fall by at least -5% this year.
In Australia, it looks like their second main airline, Virgin, is about to collapse later today, throwing more than 10,000 employees out of work. Virgin Atlantic is near death as well.
Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,440,500 and up +66,500 this time yesterday which is a rising tide. Now, less than 32% of all cases globally are in the US as caseloads rise faster elsewhere. The US caseload is up and they are up 24,000 since this time yesterday to 766,200 and a slowing rate of increase. Just on 9% of all US cases have recovered so far, and virtually unchanged. The disease is now spreading into the American heartland.
It is becoming clearer now that the US virus originated in Europe and may be a deadlier mutation. New research suggests that the ability of the virus to mutate has been vastly underestimated.
Australia has now over 6500 cases and little-changed over the past week, and their recovery rate has been unchanged for a growing number of days as well.
Global deaths now exceed 167,000 and this rise is slowing although it is clear that many countries report these in quite different ways. The head of the WHO said today that "the worst is still ahead of us".
There are now 1440 Covid-19 cases identified in New Zealand, with another +9 new cases yesterday and the same as Sunday's +9 increase. The number of clusters is still at 16. Twelve people have died here now, unchanged from Sunday. There are now 14 people in hospital with the disease, with three in ICU. Our recovery rate is now up to 68% and rising.
The UST 10yr yield is holding at just on 0.64%. Their 2-10 curve is little-changed today at +43 bps. Their 1-5 curve is similar at +20 bps, but their 3m-10yr curve is up +3 bps at +54 bps. The Aussie Govt 10yr yield is now at 0.84% and little-changed. The China Govt 10yr is up +3 bps to 2.59%. The NZ Govt 10 yr yield is down -4 bps at 0.92%.
Gold fell hard yesterday but is marginally higher today, up +US$6 to US$1,693/oz.
The Kiwi dollar will start today a little firmer. We are now up at 60.7 USc. On the cross rates we are +½c firmer at 95.2 AUc. Against the euro we are also firm at 55.8 euro cents. That means the TWI-5 has risen to 66.9 and a +50 bps gain.
Bitcoin has gone the other way, now at US$6,858 and a -4.3% fall 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 ».