Here's our summary of key economic events overnight that affect New Zealand, with news the economic stresses of the pandemic are still rising.
The American efforts to "get back to work" are facing all sorts of pushback, not the least from a population increasingly fearful of a coming 'second wave'. The stresses there are immense on all sides.
American inflation is falling away, according to their official April survey. It is down to just +0.3% year-on-year. Diving petrol costs had a lot to do with the overall result (-32%) but food costs rose +3.5%, rents rose +2.6% and medical care costs rose +5.8%, all items that will hurt in a pandemic where job losses are widespread.
US retail activity in the past month was down -1.5% compared with the same April period but -7.5% lower than a year ago. These are lesser falls than a week ago.
Industrial powerhouse Boeing is now very hobbled and the impact is being felt in factories nationwide. They had zero orders for the second time this year in April and customers canceled another 108 orders for its grounded 737 MAX plane, compounding its worst start to a year in almost 60 years.
The official US Government budget statement for April pegs the monthly deficit at -US$738 bln (an all-time one month record) and the deficit for the past twelve months at -US$2.9 tln (also a record). It is on its way to at least a -US$5 tln deficit in 2020 and more than -20% of US GDP. Eye-watering stuff.
In Canada there are reports that commercial landlords only collected 15% of their May rents from tenants.
China also reported its CPI for April overnight. They say inflation there rose +3.3% with food prices up +14% year-on-year, petrol down -7.9%, rents up +0.1%, and medical care costs up +2.2%. Despite these rises however, China now has a serious problem with producer price deflation which it a four year low.
China's stimulus is having some impact. Excavator sales hit the second highest on record in April (+60%) and demand for cement jumped significantly as infrastructure construction picked up.
India has announced a NZ$450 bln pandemic economic relief plan.
In Australia, the latest business confidence report shows these levels were deeply negative in April in a trough twice as deep as their last recession in the 1990s. Conditions fell in all industries except mining and are negative across all states. The employment indicator has never been worse.
China has halted to meat imports from Australia in what is being viewed as more economic coercion over the Aussie government's push for a "Wuhan investigation". That's how Canberra sees it anyway. The meat trade disruption is in addition to the barley trade. Apparently what really sticks in China's commercial craw is the Australian's slapping anti-dumping levies on Chinese steel and aluminium. But how can they be 'dumped' if they are essentially Australian iron ore and bauxite? The Australians want to sell to China at a high price, but don't want to buy the resulting products at a price lower than their domestic feather-bedded industry can tolerate. And then Canberra talks up 'free trade'. You can understand the Chinese exasperation over the double-talk. All very Trumpish.
Internationally, the OECD is saying the leading indicators they track in most major economies collapsed by unprecedented levels in April as pandemic containment measures have a really severe global economic impact on production, consumption and confidence.
All this negative data is just too much for Wall Street. The S&P500 is falling near their close, now down -0.6% after being flat for most of the earlier session. Overnight, European markets were mixed with very small shifts. Yesterday Asian markets were all lower as was the ASX200 (-1.1%). The NZX50 Capital Index managed to stand out with a +0.5% daily rise.
The latest compilation of Covid-19 data is here. The global tally is now 4,229,100 and up +81,000 from this time yesterday which is similar level of increase.
Now, just over 32% of all cases globally are in the US, which is up +19,000 since this time yesterday to 1,356,000. This is also a similar rate of increase. US deaths are now almost 82,000. Global deaths now exceed 290,000. The UK's spot as the second most infected country was brief. Infections are still rising at +4000/day (only hospitalised cases are counted there), but Russian infections are growing virulently now and have easily overtaken the UK (+12,000/day) to be #2.
In Australia, there are now 6964 cases (+16 since yesterday), 97 deaths (unchanged) and an unchanged recovery rate of just under 89%. 47 people are in hospital there (-2) with 16 in ICU (unchanged). There are now 735 active cases in Australia (34).
There are 1497 Covid-19 cases identified in New Zealand, with no new cases yesterday, a fall from +3 the prior day. Twenty-one people have died (unchanged). There are still only two people left in hospital with the disease (unchanged), and none are in ICU. Our recovery rate is now just over 93% with 99 people known to be infected (-12) and 76 of those are in 12 active clusters. That means 23 other cases are recovering in self isolation in the community (-5 from yesterday).
The UST 10yr yield is lower to just on 0.68% and a -4 bps retreat. Their 2-10 curve is marginally flatter at +50 bps. Their 1-5 curve is also flatter at +18 bps, and their 3m-10yr curve has followed the trend flatter to +57 bps. The Aussie Govt 10yr yield is down -4 bps to 0.94%. The China Govt 10yr is unchanged at 2.66%. And the NZ Govt 10 yr yield is only marginally firmer, up just +1 bp to 0.60%.
Gold is marginally firmer today, up +US$4 to US$1,701/oz.
The Kiwi dollar is also a little firmer this morning, up to 60.9 USc. On the cross rates we will also open higher at 93.9 AUc. Against the euro we are little-changed at 56.1 euro cents. These overall rises mean the TWI-5 is now 67.
Bitcoin is higher as well, up a healthy +5.9% to US$8,920. 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 ».
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.