Here's our summary of key economic events over the weekend that affect New Zealand, with news there is no sign yet the pandemic is easing significantly.
The latest compilation of Covid-19 data is here. The global tally is now 2,954,100 and up +174,000 from this time on Saturday which is a rising rate.
Now, just over 32% of all cases globally are in the US, which is up +70,000 since this time Saturday to 956,300. This is a quickening rate of increase too. US deaths now exceed 54,000. Global deaths are about to exceed 205,000. Singapore is an unusual hotspot we should all keep an eye on. There are now 13,600 cases there in an explosive lack of control you wouldn't expect from the tiny island nation. They added more than 600 new cases yesterday. In contrast, Hong Kong has recorded only 1037 cases in total so far, and only 4 deaths. In China, all patients in Wuhan hospitals have now been discharged.
In Australia, there are now 6700 cases, 83 deaths and a recovery rate of 83% and rising. 115 people are in hospital there with 42 in ICU.
There are now 1470 Covid-19 cases identified in New Zealand, with 9 new cases yesterday and more than the prior day's +3 increase. Eighteen people have died, all geriatric patients. There are now seven people in hospital with the disease, with one in ICU. Our recovery rate is now up over 78% and rising.
In China, they are approving new construction as fast as they can. But among the approvals are for 10 gigawatts of new coal-fired power generation capacity in this year’s first quarter, roughly equal to the amount approved for all of last year. And their internal tourism market is showing renewed signs of life. However, these bright spots may not be enough. China's desperate race to restart its economy may be faltering already on a national basis. New orders are contracting, especially export orders.
Not all Chinese companies are struggling. Bright Dairy, the Shanghai listed company with significant interests in Synlait Milk, has posted sharply improved results in the year to December. It is a listed portion of Bright Foods, owned by the Shanghai local government, and another listed subsidiary is the 50% partner in Silver Fern Farms.
Japan is about to announce a program to subsidise the pay 100% for about 10 mln workers laid off by their SMEs.
Last week we mentioned the imminent South Korean election, but overlooked the results. The public's perception their government is handling the coronavirus pandemic well has powered the ruling Democratic Party to a landslide general election victory. Perhaps the central lesson for politicians, democratic ones at least, is that prioritising public health, even over economic interests can pay off at the ballot box.
In the US, their Congressional Budget Office has issued new projections that show that without further action, the American federal budget deficit would be -$3.7 tln in fiscal year 2020, and federal debt held by the public would equal 101% of GDP by the end of the fiscal year. In 2019 the deficit was -$984 bln and the debt 82% of GDP. What they are reporting is a stunningly quick deterioration.
Separately, new data shows US durable goods orders fell more than expected in March. A -12% fall was expected but a -14.4% fall was reported. April will show a sharper decline of course.
Consumer sentiment as measured in the University of Michigan survey was very negative, and a small uptick last week was snuffed out in this week's report.
The US domestic rig count has fallen again and by much more than expected. A -5% fall from its new low level was expected for the week, but it actually fell -12% to just 465 active rigs. There were 805 at the start of 2020 and 1083 at the start of 2019. Capacity is being extracted now, not oil. This latest decline is their worst on record.
In Canada, their government is to bail out commercial landlords via 'forgivable loans' provided they give at least 75% rent relief to tenants and promise not to evict them.
In Brazil, the country is facing a new political crisis and their financial markets are recoiling in the fallout.
The closely-watched IFO survey of German businesses managers was very negative, and more so than the already gloomy expectations.
In Europe, leaders have unexpectedly agreed to a €1 tln collective rescue for Europe's free-falling economies as key data showed much larger declines than in the GFC. That comes after the US Congress agreed an almost US$½ tln addition to their support measures, taking them up to US$3 tln. And Japan has rushed through additions taking their support package to US$1.1 tln.
The UST 10yr yield is little-changed at just under 0.61%. Their 2-10 curve is unchanged at +38 bps. Their 1-5 curve is slightly narrower at +20 bps, and their 3m-10yr curve is wider at just on +51 bps. The Aussie Govt 10yr yield is now at 0.90% and up +1 bp over the weekend. The China Govt 10yr is unchanged at 2.51%. The NZ Govt 10 yr yield is also unchanged at 0.83%.
Gold is up +US$6 to US$1,730/oz.
Oil prices have slipped back marginally today. They are currently at just under US$17/bbl. International oil prices are soft too, with the Brent benchmark just over US$21/bbl. A major Chinese bank has had to take a US$1 bln loss from the oil price tumble. They won't be the only lender facing huge losses.
The Kiwi dollar has changed little over the weekend. We are now at 60.2 USc and a very similar level to a week ago. On the cross rates it's a different story; we are at 94.1 AUc and a -¾c retreat in a week. Against the euro we are up +¼c from our week-ago level at 55.7 euro cents. That means the TWI-5 is at 66.4, and bang-on our four-week average.
Bitcoin is up +1.4% from this time on Saturday, now at US$7,624. 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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