Here's our summary of key economic events over the weekend that affect New Zealand, with news economic stress is promoting political stress as governments pull back from cooperation.
Firstly in Australia, they have decided at a national level that all states except Western Australia will open their borders by late July and the first foreign students will be allowed in from overseas. But the spat with China is a serious issue for them. There is rising alarm among universities and tourism operators in Australia that China's travel warnings for tourists and students are here to stay.
Also under threat are Australia's coal mines. Their new risk is that they won't be able to get insurance, and insurers shy away from covering risks that add to climate change exposures. Another danger is that China is signaling it may avoid buying Aussie coal, a policy that is seeing their own local coal prices rise. China is looking elsewhere. The growing China-Australia hostility is a tricky dynamic for New Zealand.
The one area China is not punishing Australia is in its iron ore purchases. And the price they are paying just keeps on rising.
Going the other way, India’s industrial production shrank a record -55% in April with manufacturing crashing a whopping -64%.
In Japan, industrial production fell a sharp -15% year-on-year in April. This was an awful result. Business sentiment is now at an eleven year low. In response, the Japanese government has enacted +¥32 tln in extra stimulus. (+NZ$460 bln). The irony of this is that NZ$1.5 tln of previous stimulus hasn't yet been spent, "mired in a bureaucratic logjam".
In England, they have posted a -20% drop in economic activity in April. It is a fall of historic proportions - even in the Great Depression of the 1930s, GDP didn't fall more than -1% in one month.
In the United States, Americans’ view of the economy improved in early June as the country tried to reopen. The latest survey of consumer sentiment rose in the past two weeks and above what analysts were expecting. But the level is still very low, down -20% from this time last year. Fear of income loss is very high, driven by what might lie ahead with a second wave from the pandemic. And as each day passes, that fear is becoming more realistic.
And the Fed released their Monetary Policy Report to Congress giving more details of the fragile situation American households and businesses are in. A key message is that these vulnerabilities will be persistent.
In Canada, they are seeing rising household debt for the first time since 2017.
The latest compilation of Covid-19 data is here. The global tally is now 7,838,800 which is up +265,000 in two days, and a faster rising pace. Global deaths now exceed 423,000. France, Germany, Italy and Spain have crushed their curves. The UK hasn't yet. And Canada has joined the list of countries with more than 100,000 infections and has recorded almost twice as many deaths as China.
Just under 27% of all cases globally are in the US, which is up +50,000 since this time Saturday to 2,083,100. This is also a faster rate of increase focused on large rises in Texas, California and Florida, a sun-belt trend. It is becoming clear that 'reopening' is raising the infection rate. US deaths now exceed 116,000.
In Australia, there have been 7320 cases (+30 since Friday), 102 deaths (unchanged) and a recovery rate of just over 93% (rising). 16 people are in hospital there (-1) with 3 in ICU (+1). There are now 380 active cases in Australia (-25).
The UST 10yr yield is a little higher today, bouncing off Friday's decline and up +5 bps to 0.71%. But that still means it is down -18 bps in a week. Their 2-10 curve is only marginally changed at +51 bps. Their 1-5 curve is a little steeper at +15 bps, while their 3m-10yr curve is also little-changed at +56 bps. The Aussie Govt 10yr yield is unchanged at 0.89%. The China Govt 10yr is down -2 bps at 2.78%. And the NZ Govt 10 yr yield is lower too, down -5 bps from Friday to 0.81%.
The gold price is little-changed from Friday, still at US$1,732/oz.
Oil prices are holding at Friday's level. They are now just over US$36/bbl in the US. The Brent price is just under US$39/bbl.
The Kiwi dollar is slightly firmer this morning at 64.5 USc. On the cross rates we are still at 93.9 AUc however. Against the euro we have are firmish at 57.3 euro cents. That means our TWI-5 is marginally higher at 69.3 but -60 bps lower than this time last week.
The bitcoin price is in another quiet phase, one that has lasted four days and has the price at US$9,392 today. And that is almost -4% lower than a week ago. 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 ».
Our currency charts are here.
97 Comments
An interesting illustration (linked below) published on 2nd Feb suggesting the path of the virus over ensuing months. It seems to be following the projections, and if it continues; we being at the "Officials end quarantine, declare virus is under control. Hope for cures and vaccines feeds complacency" stage, then in no time at all we will have entered the End Phase of "....global economy slides into Depression'
https://www.oftwominds.com/photos2020/exponential-virus2-20.png
It's pretty clear to anyone that can read data... we are just at the start of this pandemic, not half way through it, nor near the end. We have just entered the tunnel and we don't know how many curves the tunnel has, but we definitely can't see the light at the end yet.
Right now, I think most of the worlds best hope is herd immunity due to multiple jurisdictions not going into proper lockdowns (or any lockdown). Populations thrown under the bus for the economies. Who knows how long this will take to build up though with lots of reports of multiple re-infection. The worst case is we get a more virulent and deadly mutation, the best case is that it disappears via a vaccine or because it's decided it's had enough (like the first SARS virus). I simply can't imagine a vaccine however, it's the same family as SARS/MERS and years later, we don't have one for those, despite lots of initial optimism.
Interesting mail drop from Labour in weekend outlining all the measures they have rolled out for the economic recovery. The 15b in infrastructure spend was a key one, I am just trying to find what the 15b is being spent on, have not found any news links that add up to that amount? Also the 11k of jobs they have created in greenspace, I've seen a couple of hundred jobs that have been created that keeps getting pumped on the wilding pines and DOC mtce, but not 11k, are we missing something?
Also the 11k of jobs they have created in greenspace, I've seen a couple of hundred jobs that have been created that keeps getting pumped on the wilding pines and DOC mtce, but not 11k, are we missing something?
Obviously you are ignoring the 10,800 bureaucrats they are hiring to support those 200 hundred planting jobs.
So we pay (imported?) people to plant worthless nursery grown pines and pay other (imported?) people to kill worthless self seeded pines. We then pay unknown people overseas a yearly tax for the wonderful benefit of the planted pines in making the planet an unmeasurable amount cooller?
Gosh, that's clever.
I posted this last week. You are bang on Rodger!
by DD62 | 10th Jun 20, 10:47pm
Jones and co are to thick to see the irony here! The only difference between wilding and plantation pines is one is planted in straight lines and other by the wind. When the great carbon grab runs its course and the speculators leave, we will be left with huge plantations of wilding pines that no one wants! Pine is a rubbish timber and with no silverculture is good for pulp. The carbon speculators won't spend a cent on silverculture. Leave the land as farms! ( I do realize that wilding pines are mostly a different pine to pinus radiata)
If you think 1080 is working you have not got a clue about the NZ bush. Reading DoC PR and what is really going on are two completely different things. Areas that have had never had 1080 contain more native bird life than areas that have been dropped.
OMG listening to DoC and their 1080 PR is the same as listening to the Fed saying that money printing will not harm the global economy.
I wouldn't have a clue about that stuff but I see first hand large areas that are void of life after 1080 drops and areas that have never had 1080 with by far more native bird life.
Killing rats and possums which insects feed on and die from it do not encourage the insectovors to prosper in that area. 1080 is also readily transportable into plants and kill insects that feed off the trees. https://www.scoop.co.nz/stories/SC1105/S00067/1080-poison-science-and-f…
You maybe haveing a tin foil hat go at me but basic science shows that by adding poison to a system creates a boom bust cycle.
DoC, due to the coming mast event (trees flowering and producing seeds, creating an abundant food supply) we need to drop 1080 to counter this.
Dropping 1080 kills the majority of what is in an area, there by creating an abundant food supply, which in turn promotes faster breeding in the rat population.
A mast event is a naturally occurring event and 1080 is chemically induced. Both create rat plagues.
Over 60 years of 1080 and DoC says this about rat plagues produces by 1080.
"Teasing out the effects of poisoning operations from the effects of natural food supply is challenging and we are only just beginning to understand the phenomenon," he said. Seriously over 60 years and you are just starting to understand this???
http://i.stuff.co.nz/nelson-mail/news/4570628/Rat-plagues-linked-to-108…
https://kapitiindependentnews.net.nz/rats-thrive-after-1080/
You can not argue with the fact that poison creates an abundant food supply after it is applied and the fastest breeding species in that area will produce extra young to capitalize on that availability.
the US has been setting this precedent for a long time that if any one challenge its hegemony, it can sanction.
AND the US allies have been fine about it.
China is simply following the US examples and there should be no reason that the US allies are not fine about it.
what goes by comes back.
What goes around comes around. i think you might be right Xing. The US has long been unable to understand why many parts of the world don't like them, while they run rough shod over any and everyone. COVID will bring a lot more of this home to roost. But make no mistake, there is a lesson here for China too. Be too much the bully, and the world can turn against you very easily. We need to find ways to live and work together. this is not about racial or cultural supremacy, political power and privilege, but ultimately survival of the species. This cannot happen if we bequeath a wasteland to our children.
In most cases you may be right KH, but be careful. There is little doubt that Aussie is a vassal state of the US, and links have been provided to show the US involvement in the sacking of the Gough Whitlam government. Being too close to that kind of political alliance could be problematic, considering the vicissitudes of American politics.
Our biggest problem from this perspective is our over reliance on imports and an utter lack of any ability to effectively defend ourselves because of a military that has been neglected for far too long.
Actually, China builds quite a lot of ships. Military ones at that! It's all part of an obvious strategy to 'control' the South China Sea, and perhaps even one day 'conquer' Taiwan.
And just to keep things factual, China today is the result of many military conquests throughout history. Today they are politely referred to as "dynasties". On the international front, the Yuan dynasty conquered Korea in the late 1200's. They also made 2 failed attempts to invade Japan in 1274 and 1281. You may also wish to confer with the Vietnamese whether China has ever tried to conquer or not. Just sayin'......
I suggest you compare the % Han chinese population of Tibet and East Turkistan from 1950 to date. You can then check Taiwan from 1500 to date. It may even be interesting to compare % Han Chinese of Auckland since 1950 too. China will not invade because it doesn't need to. It wants countries to be vassal states rather the way the British did 200 years ago - as one Victorian British PM said avoid empire it costs too much to run other countries - the biggest mistake the British made was declaring an Empire first with India and then chopping up pieces of Africa - that was the start of Britain's economic decline (roughly 1870s) but they didn't notice it. One fact that is known about the rather secretive Chinese leadership is its serious interest in history - it won't make the same imperial mistake European countries made.
Not so sure it's an invasion or Chinese hegemony but it is pretty obvious that like the US they are making plays to secure resources for the future. That is why I'm not too worried about the Oil and Gas moratorium - why export our strategic supplies of these resources for a few IOU's - leave it in the ground until we need it
I'm not a big fan of Chinese govt since I grew up in NZ and share the NZ values, but I think the life in US is generally deteriorating and I'm not even sure what are the American values any more. As a small country such as NZ, the best thing is not to pick sides. I also fear under the current "political correctness" environment, some of the sins committed by dictatorship can be repeated in what's so called liberal and freedom of speech countries. Such as the event of removal of the movie "Gone with the wind", doesn't strike similarity to Chinese cultural revolution? The statue of Churchill people now want them gone...
Good points Sophia. People are products of their time, and looking back 50,100, 200 years and judging someone based on today's knowledge and culture is not going to bring about a good outcome. Rewriting history increases the risk of not learning from it. Plus there is a lot of emotion and not a lot of fact in the current movement. for example banning the Confederate flag because it represents slavery is just plain wrong. It never represented slavery. The US civil war was fought over state versus federal government authority only. Northern and Southern landowners both had slaves working their estates. The north however was running out of bodies to throw into the maw of combat against the southern armies, so Abraham Lincoln offered slaves their freedom if they enlisted in the Union army. If they didn't enlist ... they remained as slaves. So the stars and stripes are as representative of slavery as is the confederate flag.
In NZ the destruction of colonial statues is understandable, but as an example Te Rauparaha murdered and raped his way down the North Island. So is his statue not just as unplatable as the rest? And to that end is he not glorified every time his haka, Ka mate, recited?
Lincoln first and foremost took the North to the war over secession. To stop the dissolution of the then membership of the United States. The war on those grounds alone was illegal. The constitution allowed states to secede. There was some pretty severe stuff going on for a democracy. Lincoln suspended habeas corpus and enacted draconian measures to counter so called sedition. Without that action Maryland might well have joined the South and the dynamics of the whole damn shooting box reconfigured.
Apologies for being lazy. Should have carried on a bit to add you only need to read the Gettysburg address, where there is no mention of slavery as a root cause, to understand what the North’s position was. As you correctly point out abolition had been enacted in those states many years before the civil war. The heavy hitting protagonist on abolition for the North was Massachusetts and the counter for the South, North Carolina. It was the latter that triggered it all in the end.
Japan is emerging as the key strategic component in the Far East. With the sabre rattling over Taiwan, the skirmishes on the NW border, China in its usual not so subtle way, appears to be adopting the old maxim that offence is the best defence and if not that, a proven method to distract trouble at the mill back home. Japan is going to get themselves a state of the art aircraft carrier, wonder why. Also wonder what other “special” enhancements are underway to what essentially has been limited to a self defence force. Not much scope to make any military play on the South China sea region if there is a united force of Japan, Taiwan, Sth Korea & the US Navy coming and going.
Japan, Taiwan and Vietnam could all build nuclear weapons in a few months should they choose to, they have plutonium in their reactors and the tech is relatively easy 1940's level, easily done using modern tech base. They each have indigenous missile systems that would likely let them build short range nuclear weapons systems in short order.
It's a point that I haven't given too much thought to - that China's sabre rattling is more about domestic stability than external issues. It would be good to get a frank and independent view of what morale is like among the people. Is there growing unrest, or are they keeping the faith in their dictators?
no need for survey, I represent 99%.
after seeing the how the West handles pandemic, treats ethnic minority, and lies about China in every aspects, we are all very proud of China and how competent the CCP has been to make China rejuvenation happen in such a short period of time.
thumb up.
I didn't ask for a survey pal.
I asked for independent opinions. Not brainwashed opinions like yours.
I realise it's very hard to get independent views because the CCP tortures or kills people who give them. So the people are living in fear.
I guess that's why you live here?
So if you are after an independent opinion... I have quite a few Chinese friends who are living there who I talk to every so often and I lived in China for 5 years or so.
Your characterisation of "So the people live in fear" is completely wrong, at least for the majority. Generally people don't really care about the central government in China that much, because it's continually providing them with a higher quality of life. They aren't as political as we are, they have accepted CCP party rule and see that it has been really good for their country. Even friends who are minorities in the SW of China talk about how good the party has been for them, quite often promoting their culture and helping them with development. That's not propaganda, having visited lots of remote places first hand, you can see it happening pretty damn well. Which is why 100s of millions have been lifted out of poverty in the last 50 years - that's not just luck, it's good management. The hierarchical democracy aspect of the CCP parties inner workings means the best people get raised to the top (arguably a combination of their guan xi, relationship building skills, and their talent), which is why they have been kicking ass for the past few decades with only the occasional faltering step. They literally have some of the best talent in the country running their government. Opposed to the West which has been increasingly suffering from idiotic leaders who are generally stupid people that are out of touch with reality, yet think they are smart. The West is largely run by corporate interests now, who care little for the long term or peoples general well being.
Yes, if you are in China you cannot question the CCP's right to govern, basically it is absolute. But at the same time what we don't see in the West is everything that happens in China, like protests and expose's often about corrupt officials, which runs counter to how we think things operate in China. We only see the bad stuff that paints China and the CCP in a bad light, there is a clear media bias. But issues that affect the people are actually widely discussed, the CCP doesn't just send in tanks every time. Why don't they just send in the tanks? Because what you may not realise is that social harmony is what the CCP is most concerned with preserving. This means that the CCP is actually scared of it's people revolting. Yes they know they have some power to cut off a full revolution before it happens, but they also know that if the people decide they don't want the CCP anymore, there is little they can do to stop it. Social harmony means crushing terror groups and crushing things like viruses which could cause severe disruption to social harmony. Heavy handed immediately to prevent long term social tensions. Day to day though, if you don't question the governments right to rule, you are absolutely fine and can do whatever else you want. It's a land full of oppourtunity, very different to Western countries which have become very conservative and unwilling to change.
For thousands of years, China has generally had Simply put, the Chinese people actually need a system of government like they have. Combine it with capitalism which seems to be an awesome match for their innate abilities and you have a force to be reckoned with.
Lastly - all major countries torture or kill people who don't share their values. Can you argue that the illegal invasion of Iraq was some sort of moral victory even though likely half a million Iraqi men/women/children were slaughtered by the US? Does that make you proud? What about the current supplying of weapons to the Saudi's so they can commit genocide in Yemen? Of course the US isn't involved (if you don't count the state sponsored mercenaries Academi, formerly Blackwater). You want torture? How about Guantanamo Bay and all the renditioning activities by the US? Are we proud of all this because a President declares a group "terrorists"? Trump is one step away from declaring ANTIFA terrorists, largely a group of liberals some of who are violent, does that mean they can torture and kill their own citizens with drone strikes?
It's easy to pretend everything is fine in the West and China is evil, but looking at it with clear eyes is to be encouraged. Yes China does some bad stuff with some of it's people, but it's generally only the revolutionaries in their country. They are very concerned with the Uighurs as an insurgency group, much like they are with potential ones from Tibet. But that doesn't make them more or less evil than the current hegemony.
Thank you; well argued and fairly convincing. The Chinese control of the media and the potential dangers of their social profiling software is a worry. But don't under-estimate the dangers of the latter in the west - if I was younger I'd be trying to disguise myself on this website because in 10 years from now some uncontrollable AI system looking at my comment history could affect my being searched at customs, availability of social housing, place on the elective surgery list, school availability for my grandchildren etc.
The American Institute of Economic Research weighs in with a devastating exposé of the inability of models to capture the complexity, responsiveness and sheer cussedness of we Humans. Remember the 'tens of thousands of deaths' shtick here? Thought not - down the memory hole for such catastrophiliac utterances!
You can suffer a brain aneurysm trying to follow these tortuous articles of competing views
When there is contention over competing views - it means the science isn't settled
It took 80 years to settle the structure of DNA
DNA was first discovered in 1869 by Swiss researcher Friedrich Miescher
Chargaff DNA Rules were established by Austrian born chemist Erwin Chargaff, late 1940s
In 1950 Linus Pauling proposed DNA was triple stranded helix
In 1952 Rosalind Franklin discovered via x-ray it was double stranded
In 1954 Crick and Watson using Franklins x-rays confirmed it was a double helix
Franklin was ineligible for the Nobel Prize as she died in 1958
My daughter in California tells me everything is going back to normal, shops are open people are at the lake, everyone just needed to get back to 'Normal'.
Most of her friends don't trust the media and think the media blew this up into something it wasn't.
Andrew "back to normal" is a pretty optimistic take. Things are reopening but business is crazy slow. My business is heavily CA focused and we are very, very slow. Once the Federal government stops the firehose of money I expect us to get very busy but who know what will happen in that department.
Did you get my email? I have a few specific questions I'd like to ask. I can also just ask on here but it will be a bit off topic.
Been looking at soil temps the last week and now sitting on 11º, when the soil gets below 10º then we will have little to no growth. We are still in a drought, it is green, but the streams and dams are dry and we get 10 mm on occasion but never the 100 mm we really need. Dry soils cool quickly and we are getting runs of frosts, a good one yesterday with slightly smaller one this morning.
I can still see my drill rows which have normally closed in by mid April, not much grass and a lot of winter in front of us.
Actually the land around here is pretty good. I am mucking around with some new ideas, so hopefully the future is bright. This year is a one in fifty year drought, so not something we get to experience more than once or twice.
If all else fails there is always 'carbon credits'. Thanks for that taxpayers
I remember swimming any time of year on AKL's beaches and eating mussels and oysters around Orere Point.
Can one still do that without a good chance of getting poisoned?
And if what happened and is still happening with WLG's sewage leaking into the harbour, if that was a farmer he would be severely and financially punished!
We're slowly getting grass cover up to where it should be. Biggest plus we have other than cows going into enough grass (3000kgsdm/ha plus) is that it's so dry utilisation is about as high as grazing pastures gets. Only thing worse than having no grass is having heaps and watching stock plow it into the mud.
We don't get Frost's here, just a katabatic type wind down the valley. Stops most Frost's but it's still freezing cold.
China's hostility towards Australia builds.......
Is China not hostile towards India, UK, USA, Europe......
Where does NZ stand as sooner than later NZ will have to take a posistion between Democracies of the world or China.
Or
Does NZ wants to be Rock Star Economy based on Chinisse Money at the cost of souverignity.
Depends on who governs us.
Todd said in the weekend that he wants to increase spending and not increase taxes..so he's going to have to borrow, pump the migration and housing ponzis, grease up to China etc.
Luckily there is little chance he and his party will govern.
I wouldn't hold my breath - Democracies have had 40 years to do this but have turned a blind eye to set up factories there for cheap labor and in the vain hope of tapping in to the huge consumer market down the line. Now that China is turning it around on them and exposing their hypocrisy, they are starting to open one eye and cry foul. Pathetic.
Hostility against any person or country who does not follow their master's diktat.
China with Australia is trying to intimidate countries like NZ. It is up to NZ if it wants friend's or Master.
Labour party should also come out in open just like National party who are open about China being our master for Rock Star Economy = Money.
The new shopping experience, not for me
https://www.youtube.com/watch?v=6LFz5qFzwE0&feature=youtu.be
Hmmmm - from the BNZ
The RBNZ announced that it would buy $1b of nominal bonds this week for its large scale asset purchase programme, with slightly more weight towards shorter dated bonds, compared to last week ($60m more 2023s, $10m more 2027s, $30m less 2031s and $40m less 2037s). This comes ahead of NZDM’s syndication of 2024 nominal bonds. The RBNZ will again offer to buy $75m of linkers and $50m of LGFA bonds.
If this string puller is involved in the US elections we can expect the rhetoric towards the CCP to be cranked up to full volume.
https://asiatimes.com/2020/06/bannon-tells-at-us-election-is-all-about-…
The utter hatred China's neighbors have for them is remarkable. The citizens of their direct neighbors have an incredibly negative view of China. People that barely speak English wanted to discuss this with me wherever I went in Asia. I had a guy run up to me in a market in Mongolia and loudly tell me not to buy something because it was made in China.
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