Here's our summary of key economic events over night that affect New Zealand, with news China is facing a very fast-rising bad loan problem.
But first in the US, new claims for unemployment came in at +963,000 last week, which was less than expected. 15.2 mln people are claiming these benefits now a drop of -625,000 from the previous week as benefit qualifications start expiring. (In March it topped out at 22 mln.) Congress still hasn't agreed any replacement support.
Mexico is facing a strong economic contraction this year and expects only a moderate recovery for 2021. Today their central bank cut -0.5% from its benchmark policy rate to 4.5%. But inflation is back above +3% pa so the chances of further cuts are receding.
China reported an increase, admittedly a small +0.5% rise, in foreign direct investment entering the country. This is a turnaround from net outflows over the past few months.
And in eastern China, authorities at the port city of Yantai said imported frozen seafood was detected with a strain of coronavirus. It was on the packaging, not the chicken imported from Brazil
shrimp imported from Ecuador.
And they have financial contamination too. Their top banking regulatory official said that the country’s banks will have to deal with ¥3.4 trillion worth of non-performing loans in 2020. That is up almost +50% from 2019 and the value of bad loans could be even higher in 2021.
In India, inflation has come in sharply higher than expected, up +6.9% in July from the same month a year ago. Food inflation was up to +8.7% with meat and fish up almost +19%. Milk products were up +6.6%. Floods in eastern India are taking the blame but if the trend continues it will be destabilising for their government.
Australia's jobless rate rose marginally in July, but employment grew more than expected. But two thirds of the growth was in part-time work. This data is before the Victorian lockdown. There are now 1 mln Aussie workers jobless.
Wall Street has started today marginally lower. The S&P500 is down just -0.1% so far today. Overnight however, European markets were lower, down about -0.5% but London fell -1.5%. Yesterday, Shanghai and Hong Kong ended unchanged but Tokyo was up a very strong +1.8%. The ASX200 was down -0.7. The NZX50 ended its day unchanged after giving up some stronger earlier gains.
The latest global compilation of COVID-19 data is here. The global tally is 20,706,000 and that is up +282,000 since this time yesterday. Global deaths reported now exceed 751,000 (+6,000).
A quarter of all reported cases globally are in the US, which is up +52,700 from this time yesterday to 5,383,400. US deaths are now just over 169,600 and a death rate of 512/mln (+3/mln). And the net number of people actively infected in the US rose overnight to 2,398,000, so back to more new infections than recoveries.
In Australia, there have now been 22,358 COVID-19 cases reported, another 231 overnight, and still very much concentrated in Victoria. But there were another +12 in Sydney and NSW can't seem to shake its small community transfer outbreak. Western Australia had +2 more. Australia's death count is up to 361 (+9). Their recovery rate is now just over 58%. There are still 9001 active cases in Australia (unchanged) indicating a rising recovery rate and as many recoveries as new infections now.
The UST 10yr yield is firmer at 0.72%, up +5 bps from this time yesterday and getting most of that jump in the past hour. But all of this movement is at the long end. Their 2-10 curve is +6 bps steeper at +56 bps. And their 1-5 curve is up as well at +18 bps, while their 3m-10yr curve is up +6 bps at +64 bps. The Aussie Govt 10yr yield is up marginally at 0.93%. The China Govt 10yr is holding at 2.98%. But the NZ Govt 10 yr yield is -9 bps lower at just under 0.65% and a new all-time low.
The price of gold is still volatile and today is up +US$25 to US$1,958/oz and a +1.3% rise from this time yesterday. Silver is up almost +2%.
Oil prices are soft today. They are now just over US$42/bbl in the US and the international price is now just under US$45/bbl.
And the Kiwi dollar fell overnight and is back at 65.6 USc. Against the Australian dollar we are also soft at 91.6 AUc. Against the euro we are down even more at 55.5 euro cents. That means our TWI-5 has dropped to 68.8.
The bitcoin price is virtually unchanged from this time yesterday at US$11,516. 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 ».