Here's our summary of key economic events overnight that affect New Zealand, with news mismanagement of the pandemic is being compounded by mismanagement of their economy in Washington.
For the US Government, it was another disastrous financial performance in June, recording a -$864 bln deficit for the month (-NZ$1.3 tln). That takes the result for the past 12 months to a deficit just a fraction under -US$3.0 tln, or -13.5% of GDP. It is the worst deficit in recorded history. And it is double the previous peak reached in December 2009 (-10.1% of GDP).
The latest NY Fed survey of consumer expectations shows they are less optimistic about earnings growth, income growth, and job finding expectations compared to the period before the COVID-19 outbreak. But some indicators measuring the outlook for household financial conditions show increases, such as house prices are expected to rise. Expectations for inflation are lower at 2.7% pa.
One place where inflation is rising, and quickly, is India where it is up to over +6% in June.
Also rising and against expectations is the iron ore price, now at over US$106/tonne and near is recent high of a year ago.
In China itself, what is rising sharply are flood waters, especially in southern China.
But elsewhere, normal economic activity is returning and more core data supports the claim. But their new normal is still less than their old normal.
In the UK, it is becoming clear that they won't get the deal they need with the EU over Brexit and that the hardest version of a separation will happen at the end of the year. Preparations are underway for a 'no agreement' split.
In Australia, it is becoming clear that their wage subsidy scheme has become toxic for many firms. The deal was, take the subsidy but don't lay off the employees. However business hasn't returned for many so that they can survive with the old payroll. And now it turns out vacation pay has to accrue during the subsidy period. So firms who couldn't pay before the subsidy are in a bankrupt situation now. The effect will be widespread and fierce. New rolling lockdowns are the last straw for many.
Wall Street is currently up +0.3% (although earlier is had gained as much as +1.2%). Yesterday Shanghai rose +1.8%. Hong Kong gained +0.2%. But the daily winner was clearly Tokyo which was up +2.2%. Overnight European markets had a good night as well, generally up about +1.3%.
The latest compilation of COVID-19 data is here. The global tally is 12,984,800 and that is up +200,000 since this time yesterday. Global deaths reported now exceed 570,000 (+4,000).
A quarter of all reported cases globally are in the US, which is up +55,000 overnight to 3,444,100. US deaths now exceed 138,000. The number of active infections in the US is now up +26,000 to 1,771,200.
In Australia, there have now been 9980 cases reported, another +183 since this time yesterday, and still concentrated in Victoria - although NSW is now having a surge of its own. Their death count is up +1 at 108 and 18 people are now in ICU (+1). Their recovery rate has slipped back further to under 78%. There are now 2103 active cases in Australia (up +142 in a day).
The UST 10yr yield is holding at 0.64%. Their 2-10 curve is stable at +48 bps. Their 1-5 curve is also little-changed at +14 bps, and their 3m-10yr curve holding at just under +53 bps. The Aussie Govt 10yr yield is up marginally to 0.91%. The China Govt 10yr is marginally firmer, up +2 bps at 3.15%. And the NZ Govt 10 yr yield is unchanged at 0.98%.
The gold price is up today, rising by +US$9 and now at US$1,808/oz.
Oil prices are holding unchanged today. They are now just over US$40.50/bbl in the US and the international price is just over US$43/bbl.
But the Kiwi dollar is marginally softer at just over 65.7 USc. We have been following the greenback down so that means on the cross rates we are -½c lower at 94.2 AUc. Against the euro we are down -½c as well at 57.8 euro cents. That means our TWI-5 has fallen to 70.2.
The bitcoin price is +1% firmer at US$9,306. 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 ».