Here's our summary of key economic events overnight that affect New Zealand, with news China is pressing Australia hard, with trade threats for their foreign policy stances.
But first up today, we have another dairy auction. The overnight event brought a minorly positive +1.0% rise in overall prices, underpinned by a rather good recovery in the SMP price, which was up +7.4% than the auction two weeks ago. But, really, that is just a return after a hefty dump two auctions ago. WMP prices were -2% lower however - but they didn't suffer the big earlier decline. Volumes offered and sold are seasonally low although they were nearly +10% higher than the same auction a year ago. Prices in New Zealand dollars rose marginally less than in US dollars, up just +0.4%. This auction will not change any payout forecast, but it is satisfying in that it comes after two previous declines. All the same, overall prices are -15% lower than at this time last year.
The steam has gone out of yesterday's irrationally exuberant rally on Wall Street, but the pattern today is to hold. The S&P500 is up just +0.2% so far. In Europe, there were mainly falls, some sharp. But Frankfurt was up +0.2% while London dropped -0.8%. Yesterday, Asian markets generally ended strongly positive with most gains exceeding +1%. The ASX200 was up +1.8%, but the NZX50 Capital Index only managed a +0.3% rise.
In the US, housing starts fell -30% from year-ago levels, and building permits granted fell almost -20%.
The latest weekly update of American retail sales has them falling faster than last week, down another -10% this week. But not every retailer is suffering; giant Walmart is one retailer who has made big gains during the pandemic stockpiling frenzy.
In Congressional testimony earlier today, both the Fed boss and the US Treasury Secretary found themselves under intense scrutiny with lawmakers uneasy about how officials have handled their role in the crisis.
In Europe, car registrations in April were down a startling -76%. But economic sentiment indexes have become sharply less negative in the latest survey.
China seems to be stepping up its pressure on Australia via its exports to the Middle Kingdom. First it was barley. How reports suggest wine and dairy products will soon get the cold shoulder. Products like seafood, oatmeal and fruit that could be subject to stricter quality checks, anti-dumping probes, tariffs or customs delays. And there is also talk China's State media may run a consumer boycott campaign of Australian consumer goods. New Zealand exporters will be watching nervously. Wellington is also treading a fine line.
China isn't punishing the Aussie iron ore sector though.
The release of the RBA's meeting minutes has revealed the regulator is particularly concerned for the commercial property development and landlord sector. They say: "Rising vacancies and reduced rent would be likely to lead to lower valuations, which would pose challenges for leveraged property investors and developers. Retail property was already experiencing rising vacancies and falling capital values prior to the current downturn. The effect on retail businesses of the social distancing measures [will] exacerbate these problems."
The latest compilation of Covid-19 data is here. The global tally is now 4,635,200 and up +50,000 from this time yesterday which is a slower level of increase.
Now, just under 33% of all cases globally are in the US, which is up +22,000 since this time yesterday to 1,518,800. This is also a slower rate of increase. US deaths are now exceed 91,000. Global deaths now exceed 300,000. Canada has joined the US and the UK as western countries unable to get on top of their infection rates (plus Sweden of course). Canada is keeping its border with the US closed until June 21 at least.
In Australia, there are now 7068 cases (+8 since yesterday), 100 deaths (+1) and a recovery rate of just on 90%. 47 people are in hospital there (+2) with 11 in ICU (-1). There are now 558 active cases in Australia (-14).
There were zero changes to any coronavirus infection levels yesterday in New Zealand, for the ninth straight day. Our recovery rate is now just on 96% with just 40 people known to be still infected nationwide (-5).
The UST 10yr yield has held on to most of yesterday's jump, but is back -3 bps today to 0.71%. Their 2-10 curve is unchanged at +54 bps. Their 1-5 curve is also unchanged at +20 bps, and their 3m-10yr curve is also unchanged at +62 bps. The Aussie Govt 10yr yield is up +2 bps to 0.98%. The China Govt 10yr is up +3 bps to 2.73%. But the NZ Govt 10 yr yield is up +2 bps at 0.67%.
The gold price is higher today, up +US$11 to US$1,743/oz.
Oil prices are little-changed today. The US crude price is holding at just on US$32.50/bbl. The international oil price is stable at just on US$34.50/bbl.
The Kiwi dollar is continuing its strong rise, up another +1c again today to 61 USc. That is a +170 bps gain since Saturday and erases all of last week's retreat. On the cross rates we have risen as week, now up to 93 AUc. Against the euro we are up to 55.8 euro cents. These moves up mean the TWI-5 is now 66.9.
Bitcoin has held fairly steady since this time yesterday, now at US$9,674 and up less than +1% on the day. 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 ».