Here's our summary of key economic events overnight that affect New Zealand, with news the Kiwi dollar is rising as equity markets rise.
The Americans are going into their long weekend holiday with some very mixed signals from their jobs market. First the good news: the June non-farm payrolls data reported stronger jobs growth than expected before the recent virus spike. A gain of +3 mln jobs was expected but this survey shows the gain was a stronger 4.8 mln in June. Their official jobless rate is now 11.1%. Their participation rate improved to a very low 61.5%. But that jobless rate is on the way to 14% before it shrinks permanently.
But the same survey reported that those who returned to work are being paid a lot less, and doing much reduced hours. Both factors reduced the average workweek and average pay in June. And this data means that there are almost 15 mln fewer people employed in June than February, with the part-time workforce double its February level.
The latest weekly unemployment claims data was also released overnight and that indicated a higher than expected level of claims last week with prior week's data revised higher. There are now 19.3 mln people on unemployment benefits and most are now more than half-way through what they can claim. From October on, they will drop off and things will get really tough if they can't find work. Their "insured unemployment rate" is currently 13.2% and well above the official rate. That doesn't bode well for July labour force data.
The New York ISM report released overnight is telling. Even though business expect conditions in six months to have fully recovered, the level of new orders remains weak and there was no expectation that these businesses have re-hiring plans.
International trade is still a problem for the US. Exports of both goods and services fell while imports were stable and that raised their overall trade deficit to its second highest in history. Clearly higher tariffs aren't a solution to this long-running problem.
But Wall Street is still in positive territory today, up +1.1% in afternoon trade and liking what it saw in the jobs data. They are ignoring the dodgy bits. European markets have made even larger gains today, up about +2.8% overnight. And yesterday both Shanghai (+2.1%) and Hong Kong (+2.9%) recorded outsized gains although Tokyo (+0.1%) didn't really join the party.
In China, vehicle sales rose +11% in June from the same month in 2019 to almost 2.3 mln units, a sharp recovery and better than expected. That caps three months of year-on-year gains, although it was boosted by stronger commercial vehicle sales and significant tax rebates. But the sales reported are by manufacturers to dealers and it is not clear that the dealers are selling their growing inventories at the faster rate. There may be a Chinese car crash coming.
The latest compilation of COVID-19 data is here. The global tally is 10,761,200 and that is a sharp jump of +249,000 in one day. Global deaths reported now exceed 518,000.
A quarter of all reported cases globally are in the US, which is up +100,000 in two days to 2,713,200. US deaths now exceed 128,000. The number of active infections in the US is now up to 1,854,800, up +64,600 in a day. In Europe, the only country that hasn't crushed its curve is now Sweden where they are reporting record new cases.
In Australia, there have been 8001, another +81 since yesterday and a fast-rising tide, especially in Victoria. Community transfer is not under control there. Their death count is still at 104 but their recovery rate has slipped back to under 89%. There are now 807 active cases in Australia (up +54 overnight).
The UST 10yr yield is little-changed at 0.67%. 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 down -3 bps at 0.92%. The China Govt 10yr is little-changed at 2.90%. And the NZ Govt 10 yr yield is also unchanged from this time yesterday at 0.98% but in local trade last night it reached 1.00%.
The gold price has firmed overnight, up +US$5 to US$1,776/oz.
Oil prices have firmed again today. They are now just under US$41/bbl in the US and the Brent price is just over US$43/bbl.
The Kiwi dollar is firmer again, now just on 65.1 USc. On the cross rates we are up as well, now at 94.1 AUc and against the euro we are also firmer at 58 euro cents. That means our TWI-5 has risen to 70 and its strongest in more than four months.
The bitcoin price has fallen away overnight, down -2.3% to US$9,080. It is now below NZ$14,000 for the first time in two months. 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 ».