Here's our summary of key economic events overnight that affect New Zealand, with news the grim reality of a scaled back future is starting to sink in worldwide.
The release of the minutes from the last Federal Reserve meeting show how concerned they were over the financial situation at the end of April. They knew the crisis was big, but the sheer scale gave them a double-take on the severity of the economic threat they face. That gloomy assessment set them up for a long trudge through the crisis, one they now expect to leave permanent scars in both employment levels and for business investment. Together, an important engine of global demand has been semi-permanently impaired in their judgement.
But all States have now reopened to some degree. Returning demand and sharply curtailed local production has seen a drawdown in local American crude oil inventories, and that has given a small boost to crude oil prices overnight.
Mortgage applications were lower last week, and are now below year ago levels.
In Canada, they are moving to take equity stakes in some of their large companies that are struggling to survive. The stakes will be in return for cash injections.
And Canada is heading into a deflationary situation for consumer prices.
And inflation is falling in the EU, with now almost half their members reporting deflation. That doesn't include France (+0.4%), Germany (+0.8%) or Italy (+0.1%), but it does include Spain (-0.7%).
Relations between the EU and the UK are about to be tested again as the final rules for the Irish border near 'agreement'.
And in the UK, there are reports of more very large scale layoffs. Rolls Royce is shedding almost 20% of its local workforce.
In Sweden where they have taken a different approach to managing the coronavirus threat, their central bank sees unique threats to their financial stability, ones they expect will persist longer as a consequence.
In Japan, orders for capital machines ( a broader measure than for machine tool orders) actually rose +3% in March which was a surprising result. But they are forecasting a -5% decline in the April to June period. If that occurs, it will be much less than you might expect.
In China, they have pulled out their GFC playbook and are now increasing their "infrastructure investment" with more very large scale transport projects. The latest set are worth NZ$200 bln.
And a local tidbit - China has moved to require all e-cycle and scooter users to wear helmets, a major departure from the unregulated situation up to now. Apparently the health-care burden is just too much from the resulting accidents around these devices.
In Australia, April retail sales data reveals them falling -18% after the period of stockpiling in March. And they are down more than -9% year-on-year. Annual retail sales changes are usually just a few percent.
The latest compilation of Covid-19 data is here. The global tally is now 4,948,000 and up +313,000 from this time yesterday which is a very sharp jump.
Now, just on 31% of all cases globally are in the US, which is up +19,000 since this time yesterday to 1,537,600. This is an unchanged rate of increase. US deaths are now exceed 92,000. Global deaths now exceed 325,000. Spain, Italy, France and Germany have all now crushed their curves, and are now opening back up for business. The US, the UK, Canada and Mexico haven't crushed their's, but heck, they are opening back up anyway as well. We are all going to have to live with the dodgy consequences.
In Australia, there are now 7079 cases (+11 since yesterday), 100 deaths (unchanged) and a recovery rate of just on 91%. 43 people are in hospital there (-4) with 9 in ICU (-2). There are now 535 active cases in Australia (-23).
We now have had nine straight days where there are effectively no new cases. There are 1503 Covid-19 cases identified as either confirmed or probable. Twenty-one people have died giving a death rate of 1.4%. There are now only one people left in hospital with the disease, and they are none in ICU. Our recovery rate is now just on 96% with 35 people known to be still fighting the infection (-5) and all in known clusters.
The UST 10yr yield is down about -2 bps today to 0.69%. Their 2-10 curve is unchanged at +52 bps. Their 1-5 curve is marginally flatter at +17 bps, and their 3m-10yr curve is also a little flatter at +60 bps. The Aussie Govt 10yr yield is down -2 bps to 0.96%. The China Govt 10yr is down -3 bps to 2.70%. But the NZ Govt 10 yr yield is up +1 bp from this time yesterday at 0.68% and up +3 bps from yesterday's local trading.
The gold price is firmer again today, up another +US$5 to US$1,748/oz.
Oil prices are slightly higher again today. The US crude price is now just over US$33/bbl. The international oil price is up to US$35.50/bbl. Demand is returning as many countries ease lockdown restrictions.
The Kiwi dollar has risen yet again, today up to 61.4 USc. On the cross rates we are holding at 93.1 AUc. Against the euro we are up to 55.9 euro cents. These moves up mean the TWI-5 is now 67.1 and basically where it was at the start of the month and before the RBNZ MPS and Budget 2020.
Bitcoin has fallen away slightly today, down -1.5% to US$9,527. 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 ».