Here's our summary of key economic events over night that affect New Zealand, with news consumer inflation in the world's two largest economies is on the rise and above policy targets.
US July consumer inflation expectations rose to 2.9% from under 2.7% in June. The impact of tariffs is being felt by consumers and is now higher than its 12-month average. It is also threatening the Fed's 2% policy target limit for inflation. Unemployment expectations also rose.
Inflation in China is rising. In July it was up to 2.7% pa, a rise from 2.5% in June and more than the 2.6% expected. Food prices are rising fast (+11.9% pa) driven by pork prices (up more than +100% pa) and the impact of their floods. Beef prices however seem to have stopped rising in recent months but lamb prices are still going up, up +11% year-on-year and up +1.1% in July from June. The cost of medical care, and education, both are rising but only at only modest rates. Rent is declining. Petrol went up sharply in July, but is still down significantly year-on-year (-12.6%).
Deflation in producer prices eased a little in China in July.
In Hong Kong, police have been sweeping up the owners of an independent news organisation, Next Digital, accusing them of endangering national security and "working for foreign powers". They were handcuffed, removed and denied access to lawyers. Independent reporting out of Hong Kong is now suspect. In addition, overnight they rounded up a range of other protest leaders, taking them to unknown destinations. Internationally, Chinese military forces breached both Taiwanese and Philippine borders overnight.
Wall Street has started the week on a restrained note with the S&P500 up just +0.2% so far today. Overnight the European markets were similarly restrained. Yesterday, Shanghai ended its session up +0.8% but Hong Kong was down -0.6% and Tokyo was down -0.4%. The ASX200 rose a strong +1.8% on an expectation that the pandemic crisis in Victoria will ease. The NZX50 rose +0.3%.
The latest global compilation of COVID-19 data is here. The global tally is 19,937,000 and that is up 231,000 since this time yesterday. Global deaths reported now exceed 732,000 (+4,000).
A quarter of all reported cases globally are in the US, which is up 49,600 from this time yesterday to 5,218,600. US deaths are now just over 165,500 and a death rate of 501/mln (+2/mln). Only nine countries have a higher death rate, most of them European, and one of them is Sweden. And the net number of people actively infected in the US rose overnight to 2,378,900, so still more new infections than recoveries.
In Australia, there have now been 21,397 COVID-19 cases reported, another 313 overnight, and still very much concentrated in Victoria. There were another +14 in Sydney and NSW can't seem to shake its small community transfer outbreak. They are bracing for more school clusters. Their death count is up to 313 (+18). Their recovery rate is still just over 56%. There are now 8950 active cases in Australia (+30) indicating a rising recovery rate but still more infections than recoveries.
The UST 10yr yield is holding at 0.57%. The idea that this instrument is no longer the core signal it once was is growing. Their 2-10 curve is marginally firmer at +44 bps. And their 1-5 curve is similar at +10 bps, while their 3m-10yr curve is also similar at +49 bps. The Aussie Govt 10yr yield is little-changed at 0.86%. The China Govt 10yr is also holding at 3.00%. And the NZ Govt 10 yr yield is likewise little-changed at just on 0.78%.
The gold price is at US$2,032/oz which is down -US$3/oz from this time yesterday. The silver price has risen however and by more than +3%. The speculators have shifted to silver.
Oil prices are firmer today by about +US$1/bbl. They are now just over US$42/bbl in the US and the international price is now just over US$45/bbl.
And the Kiwi dollar fell marginally overnight and is now at just over 65.9 USc. Against the Australian dollar we are soft at 92.1 AUc. Against the euro we are up slightly at 56.1 euro cents. That means our TWI-5 is now lower at just under 69.2.
The bitcoin price is up +4.2% overnight at US$11,906. And that takes it over NZ$18,000 for the first time in a year. 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 ».