Here's our summary of key economic events overnight that affect New Zealand, with news that the economic bouncebacks have been rather weak and probably not enough to withstand a renewed virus surge.
Advance data for this weekend's American non-farm payroll release shows another recovery in jobs in June. Recall they fell more than -19 mln in April, recovered +3.1 mln in May, and now this June report suggests another +2.4 mln jobs were recovered in the past month. That is a net loss of -14 mln jobs in the past 90 days. But the bounceback isn't as strong as analysts had expected (+3 mln in June).
American car sales took a big tumble in the April-June quarter, with GM reporting a -34% fall, similar at Ford and the Japanese brands, and almost -40% at Fiat/Chrysler.
There are two June PMI reports out today for the US. The local ISM one says the US factory sector expanded slightly in June on rising orders. The internationally benchmarked Markit one says it contracted in a minor way, also held up by new order growth. Both however reported lower employment. Either way, it is a very weak bounceback on the factory floor.
In Europe, they had a PMI bounceback too, but it was weaker and is still contracting. Only France and Ireland are expanding. Germany is contracting quite fast still, mainly because it has been so export-dependent.
Globally, the story is similar. China is a bit of an outlier, as overall global recovery is very much being held back by Asian countries. But the better China data may pull them up and out of their slump.
In China, their private sector Caixin PMI pointed to a definite recovery in manufacturing conditions, with firms signalling a further rise in production and a renewed increase in total new business. This version has outperformed the official version again.
News about China is getting more difficult to verify because Beijing is expelling reporters who provide independent coverage and do not toe the Party line. And in Hong Kong, masked police arrested hundreds on the first day Beijing's new security law came into force. But despite this, thousands braved the streets to protest, an action that now requires a whole new level of personal bravery. As a lifeline, the UK has thrown open its doors to up to 3 mln Hong Kongers who want to escape. Beijing probably won't mind as it will undermine the strength of their opponents in the City if large numbers take up the offer.
Australian manufacturing conditions showed a modest improvement in June, according to the headline PMI figure, as the country relaxed its lockdown measures. However, firms were reluctant to invest in new capacity, and instead reduced employment and input purchasing in June to contain costs. All the same, the result was an expansion. The new return of lockdowns in Victoria won't help their July PMI however.
In Australia, property values have dropped for a second month in a row and picked up in pace as uncertainty builds about the financial plunge expected to come in September. And building approvals fell sharply in May, led down by a collapse in apartment consents.
The collapse of air travel in May is revealed in the latest data, especially international travel. Less than 2% of travelers remain from the levels of a year ago. Air cargo has been hit very hard too, but at least it is operating at a 20% level.
The latest compilation of COVID-19 data is here. The global tally is 10,512,400 and up +146,000 in a day. Global deaths reported now exceed 512,000 and rising by about +8000 per day.
A quarter of all reported cases globally are in the US, which is up +28,000 since yesterday to 2,638,300. US deaths now exceed 127,000. The number of active infections in the US is now up to 1,790,200, up +11,500 in a day.
In Australia, there have been 7,920 cases, another +86 since yesterday and a fast-rising tide, especially in Victoria. Their death count is still at 104 but their recovery rate has slipped back to now 89%. There are now 753 active cases in Australia (up +60 overnight).
Wall Street is still in positive territory today, up +0.6% in afternoon trade. That follows modest falls in Europe overnight. Yesterday, Shanghai has a very good day, up +1.4% while Hong Kong was up +0.4%. Tokyo however dropped -0.8%. The ASX200 was up +0.6% but the NZX50 retreated -0.9% on the day.
The UST 10yr yield is up +3 bps to 0.68%. Their 2-10 curve is holding at +52 bps. Their 1-5 curve is unchanged at +15 bps, while their 3m-10yr curve is marginally steeper at +55 bps. The Aussie Govt 10yr yield is up +4 bps at 0.95%. The China Govt 10yr is unchanged at 2.89%. And the NZ Govt 10 yr yield is back up +4 bps at 0.98%.
The gold price has slipped back after yesterday's high, down -US$10 to US$1,771/oz.
Oil prices have firmed marginally today. They are now just under US$40/bbl in the US and the Brent price is just over US$42/bbl.
The Kiwi dollar is a little firmer again, now just on 64.7 USc. On the cross rates we are up as well, now at 93.7 AUc and against the euro we are firmer at 57.5 euro cents. That means our TWI-5 has risen to 69.5.
The bitcoin price has firmed a little overnight, up +1.6% to US$9,295. 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 ».