Here's our summary of key economic events overnight that affect New Zealand, with news China's 'wolf warriors' are now targeting Australia.
But first, the latest update records +2.4 mln more people claiming unemployment benefits in the US, taking the total since early March to more than 38 mln. We may be getting used to such large numbers and this latest week is lower than last week, but this still represents a building social disaster, the scale of which vastly exceeds the Great Depression. In 1932, twelve million Americans were unemployed and one out of every four families no longer had an income. In 2020 the social safety net is helping with the income stress in the short term, but the level of real jobless level is also now approaching 25%. US jobless benefits typically last only 26 weeks.
And things are not improving for the nation's factories. The latest regional Fed survey in Pennsylvania makes grim reading for May. The national factory PMIs for May are no better. And the service sector is also still contracting very sharply, both at levels not as deep as April, but the compounding impact is deeply worrying for the core engine of global economic activity.
And the American real estate market is going into reverse too, recording its largest decline in more than a decade.
Things are arguably as bad in both Europe and Japan.
In Canada, the latest ADP employment survey is pretty grim with more than -225,000 jobs lost in April, their worst on record.
And today, equity markets are losing their enthusiasm for future prospects. The S&P500 us down -0.8% and paring back the weekly gain to under +3%. In the circumstances, any rise is hard to fathom and the 'green shoots' don't seem to stand too close scrutiny. Overnight, most European markets fell for that -1%. Yesterday, all main Asian markets were lower, as were the ASX200 and the NZX50.
There are major Communist Party meetings in Beijing this week and all eyes are on them for major announcements of huge stimulus and fiscal support for its virus-hit economy.
And in Hong Kong, Beijing has struck overnight, imposing PRC security laws and stirring outrage locally. It is a move timed to be just in advance of the annual Tiananmen Square remembrances that are a feature of Hong Kong's protest movement.
The latest compilation of Covid-19 data is here. The global tally is now 5,047,400 and up +100,000 from this time yesterday which is rising at a faster pace than recently.
Now, just under 31% of all cases globally are in the US, which is up +25,000 since this time yesterday to 1,562,700. This is an unchanged rate of increase. US deaths are now exceed 94,000. Global deaths now exceed 330,000.
In Australia, there are now 7081 cases (+2 since yesterday), 100 deaths (unchanged) and a recovery rate of just on 91%. 41 people are in hospital there (-2) with 9 in ICU (unchanged). There are now 509 active cases in Australia (-26).
We now have had ten straight days where there are no new cases. The total is still 1503 Covid-19 cases identified as either confirmed or probable. Twenty-one people have died giving a death rate of 1.4%. There is only one person left in hospital with the disease, and they are not in ICU. Our recovery rate is now just under 97%, with only 30 people known to be still fighting the infection (-5).
The Australia:China trade tiff is getting serious. China has changed its inspection procedures for iron ore imports under new rules that analysts say could be used to block Australia's most important export. And there are reports the chill will also apply to Aussie coal exports. The Americans aren't helping, cheering the Aussie and jeering the Chinese from the sidelines. China notices.
The head of the RBA is calling on Aussie banks to run their "large capital and liquidity buffers" down, previously built up for operational resilience, to assist the central bank and fiscal authorities meet the challenge of the recession starting to bite there. Depositors might have a different view. And so might credit rating agencies.
The health of Australia's business sector isn't any better than any other country, also recording an unprecentended contraction.
The UST 10yr yield is down about -2 bps today to 0.68%. Their 2-10 curve is marginally flatter at +50 bps. Their 1-5 curve is unchanged at +17 bps, and their 3m-10yr curve is also unchanged +59 bps. The Aussie Govt 10yr yield is down -4 bps to 0.92%. The China Govt 10yr is down -2 bps to 2.68%. And the NZ Govt 10 yr yield is down -5 bps from this time yesterday at 0.63%.
The gold price is much softer today, down -US$26 to US$1,722/oz.
Oil prices are little-changed today. The US crude price is now just under US$33.50/bbl. The international oil price is at US$36/bbl.
The Kiwi dollar is a little softer after its strong run up, today slipping slightly to 61.1 USc. On the cross rates we are holding at 93.2 AUc. Against the euro we are holding at 55.8 euro cents. That means our TWI-5 is now at 66.9 and marginally lower than this time yesterday.
Bitcoin has fallen away much more however, down more than -5% to US$9,033. 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.