Here's our summary of key economic events overnight that affect New Zealand, with news American jobless benefits are expiring at a fast rising pace.
In the US, initial jobless claims rose by almost +1.2 mln last week, but that was a smaller gain than was expected. Still, there are now 16.1 mln people on these state benefits and that was -844,000 less in a week as benefit qualifications start expiring. This will be an accelerating trend from here on, and cause substantial social pressure. It is already getting desperate for millions.
Meanwhile, Congress can't pass any extension because Republicans are blocking them. And States have run out of funding capacity.
Things aren't getting better on the jobs front. Job cuts announced by US-based employers jumped in July to 263,000, the third-largest monthly total ever, bringing the total so far this year to 1.85 mln and three times the level for the same period in 2019.
The New York Fed is reporting that total household debt shrank in Q2-2020 for the first time since 2014. Overall it fell -US$34 bln, but it was the -US$76 bln drop in credit card balances that drove the contraction. Only a rise in mortgage debt limited the shrinkage. Americans now owe US$10.2 tln in housing debt and US$820 bln in credit card debt, and along with other types of debt (like student loans at US$1.3 tln and car loans at US$1.3 tln), they owe a total of US$14.3 tln in debt. That is over 77% of annual GDP, and up from under 76% in the same quarter a year ago as economic activity shrank. It is the first time this metric has risen since 2009.
The central bank of China has criticised the low interest rate policies of its Western counterparts, saying these policies have not had the intended benefits and the spillover effects on the developing world are not positive.
The Philippines is the latest Asian nation to report a sharp recession in Q2-2020. After a small but unusual fall in Q1, it has reported a -16% further fall in Q2.
In Australia, the economic costs of Victorian pandemic outbreak are being felt everywhere, including for the Canberra budget. And in Melbourne, the big end of town has pressured the state government into a raft of restriction backdowns.
On Wall Street today, the S&P500 is up +0.6% so far in afternoon trade and rising. No-one there is worried about the jobs situation although European markets were spooked by the situation and fell almost -1% on the implications. Yesterday, Shanghai ended up less than +0.3%, Hong Kong was down -0.7%, giving up all of the prior day's gain. And Tokyo was down -0.4%. The ASX200 rose +0.7%, making back the prior day's drop. The NZX50 Capital Index ended unchanged yesterday.
The latest global compilation of COVID-19 data is here. The global tally is 18,876,000 and that is up +267,000 since this time yesterday. Global deaths reported now exceed 709,000 (+7,000).
A quarter of all reported cases globally are in the US, which is up +61,700 from this time yesterday to 4,999,700. US deaths are now just over 162,100 and a death rate of 490/mln (+4/mln). And the net number of people actively infected in the US rose overnight to 2,286,000, so still more infections than recoveries.
In Australia, there have now been 19,862 COVID-19 cases reported, another 418 overnight, and still very much concentrated in Victoria. There were another +12 in Sydney however and it is a worry that this growth is still there. Their death count is up to 255 (+8). Their recovery rate is now just under 56%. There are now 8495 active cases in Australia (+233) and almost all are community transfer.
The UST 10yr yield is unchanged at 0.54%. Their 2-10 curve is unchanged at +42 bps. And their 1-5 curve is similar at +9 bps, while their 3m-10yr curve is also unchanged at +46 bps. The Aussie Govt 10yr yield is unchanged as well at 0.85%. The China Govt 10yr is holding at 2.99%. And the NZ Govt 10 yr yield is firmer at just over 0.78%, a +3 bps gain.
The gold price is higher yet again today, up +US$21 to US$2061/oz and a new record high. At one point it reached US$2071/oz overnight trading. The silver price is up proportionately more, up +6.4% overnight.
Oil prices are still stable today. They are now just on US$42/bbl in the US and the international price is now just on US$45/bbl.
And the Kiwi dollar has firmed against the US currency and is now at 66.8 USc. Against the Australian dollar we are lower at 92.3 AUc. Against the euro we are down at 56.1 euro cents. That means our TWI-5 is now a little firmer at 69.6 but this is broadly where we were at a week ago.
The bitcoin price is up another +1.6% today at US$11,856. And that is a 6.6% rise in a week. 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 ».