Here's our summary of key economic events overnight that affect New Zealand, with news markets continue to turn a blind eye to the threat to earnings from the pandemic.
The factory PMI in the Chicago industrial heartland is still deeply negative, rising slightly in June after falling to a 38-year low in May. This was a disappointing result below expectations. This is the last of the regional manufacturing indices before the national ISM data for June is released tomorrow.
Last week American retail sales slipped lower than in the week prior in another disappointing result. And year-on-year, those weekly sales are now down -5.7% which represents a weekly decline of more than -US$6 bln in retail impulse.
But the June consumer sentiment index took a healthy jump from the doldrums in April and May all the same. The latest level is depressed to be sure, but it is a better sign.
In June, 30% of Americans missed their housing payments, down slightly from 31% in May but still up from 24% in April. Missed payments continue to be concentrated among renters, younger and poorer Americans, and those who cannot work remotely. A majority of payments missed at the beginning of the month are paid by the end of the month. But those who do not pay on-time in one month are much more likely to miss a payment in the following month. Some eviction and foreclosure protections are beginning to expire, creating concern that many Americans will soon lose their housing as a result of missed payments. 37% of renters (and 26% of homeowners) are at least somewhat concerned that in the next six months they will face an eviction or foreclosure.
China's official factory PMI improved marginally in June from May and records a small expansion, now out to four consecutive months. This survey has been reporting more conservative results over the past year than the similar private-sector version.
In Hong Kong, Beijing's new security law has been rushed into effect meaning that violators can be extradited to the mainland and face life imprisonment. China is facing near universal condemnation, adding to the genocide charges it faces over sterilisation of the Uighur minority in Western China.
In Australia, first home buyers and recent homeowners face higher risks of default due to higher borrowing and low savings, according to ANZ.
The latest compilation of COVID-19 data is here. The global tally is 10,366,000 and up +166,000 in a day. Global deaths reported now exceed 504,000 and rising by about +4000 per day.
A quarter of all reported cases globally are in the US, which is up +46,200 since yesterday to 2,610,400. US deaths now exceed 126,500. The number of active infections in the US is now up to 1,778,700, up +26,000 in a day. Authorities there are now eyeing 100,000 new infections daily as they lose control of the spread. Widespread stupidity is playing a role too as anti-vaxxers spread misinformation about this crisis through social media channels.
In Australia, there have been 7834, another +67 since yesterday. Their death count is still at 104 but their recovery rate has slipped back to now under 90%. There are now 693 active cases in Australia (up +38 overnight).
Markets have become too complacent as risks from the coronavirus pandemic threaten global prosperity, the Bank for International Settlements warned in its annual report. The US Fed made similar warnings overnight.
But markets continue to ignore these warnings. It's 'risk-on' for them. Today, Wall Street is up with the S&P500 gaining +0.9% in afternoon trade. They follow European markets that were very mixed. Yesterday Shanghai (+0.8%), Hong Kong (+0.5%) and Tokyo (+1.3% all gained ground. The ASX200 rose +1.4% and the NZX50 rose +1.8%.
The UST 10yr yield is up +1 bp to 0.65%. Their 2-10 curve is steeper at +51 bps. Their 1-5 curve is unchanged at +14 bps, while their 3m-10yr curve is also holding at +53 bps. The Aussie Govt 10yr yield is up +4 bps at 0.91%. The China Govt 10yr is down -1 bp at 2.89%. And the NZ Govt 10 yr yield is back up +3 bps at 0.94%.
The gold price has risen today, up +US$13 to US$1,781/oz and an eight year high.
Oil prices have softened marginally today. They are now just over US$39/bbl in the US and the Brent price is just over US$41/bbl.
The Kiwi dollar is firmer in a minor move back up, now just on 64.5 USc. On the cross rates we are unchanged at 93.5 AUc and against the euro we are firmer at 57.4 euro cents. That means our TWI-5 has risen to 69.4.
The bitcoin price has stayed down, and is unchanged at US$9,145. 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 ».