US durable goods orders very weak; US oil patch braces for big storm hit; South Korean exports rise; OECD reports sharp shrinkage; UST 10yr yield at 0.69%; oil firm and gold rises; NZ$1 = 66.1 USc; TWI-5 = 69.1

Here's our summary of key economic events overnight that affect New Zealand, with news there is a warning that a major hurricane about to hit the US could bring an "unsurvivable" storm surge that could reach many kms inland.

But first in the US, their July durable goods orders jumped sharply from the depressed June level but are still -5.0% lower than the same month a year ago. Orders for investment purposes (capital goods) were down -14% on that basis, and the non-defence capital goods orders level were down almost -20%. Despite all this real decline, markets took comfort from the July rise over the depressed June and saw that as a good recovery sign.

They however overlooked the declining mortgage application data for last week.

And that major hurricane is heading for landfall near Texas and the heart of its oil processing industry.

Usually at this time of year we are reporting on the Jackson Hole talk-fest. This year they are still talking, but the event is virtual and doesn't seem to have the same appeal. But it can be a time when some heavy hitters set out their priorities and that can be interesting.

In China, rare earth exports plunged -70% in July from the same month in 2019 according to Chinese customs data. That is the lowest monthly volume since January 2015 with a drop all attributed to depressed pandemic demand.

South Korea's export sector is feeling better with export-oriented order levels a bright spot in their economy.

Singaporean industrial production in July came in way less than analysts were expecting. It is hard making estimates when conditions are volatile, but this is a big miss and far worse than almost everyone assumed.

Indonesian motorbike sales were down almost -50% in July from the equivalent 2019 period continuing a trend that reveals how tough it is in the world's fourth largest country by population, and one we tend to ignore. Economic and social stress in Indonesia is a major strategic threat to Australia.

In Australia, their reserve bank says a -40% fall in house prices is an "extreme but plausible" scenario in a discussion paper on household debt (see page 18). They also say "banks appear resilient to a severe downturn" and that most household debt is held by those who can afford it.

The OECD is reporting that the economies of their members shrank by -11% in Q2-2020 compared to the same period in 2019. The largest decline was in the UK (-22% year-on-year) and the least was in Japan (-8%). They have a grim view of the jobs market ahead.

Back in New York, the S&P500 is up +0.9% today in late trade. They follow Europe where results similar. Yesterday, Shanghai fell -1.3%, while both Hong Kong and Tokyo both were unchanged on the day. The ASX200 also closed down -0.7% while the NZX50 Capital Index rose +0.3% although it suffered through a second embarrassing cyber attack.

The latest global compilation of COVID-19 data is here. The global tally is 23,979,000, up +259,000 since when we last checked this time yesterday. Global deaths reported now exceed 821,000 (+6,000 in a day).

Just under a quarter of all reported cases globally are in the US, which is up +43,000 since yesterday to 5,972,000 and a relentless rise. US deaths are now just over 188,000 and a death rate of 552/mln (+4/mln). The net number of people actively infected in the US rose overnight to 2,530,000, so back to more new infections than recoveries.

In Australia, there have now been 25,205 COVID-19 cases reported, another +152 overnight, and still very much concentrated in Victoria. Australia's death count is up to 549 (+24). Their recovery rate is up to just under 80%. There are 4561 active cases in Australia (-158) indicating a turned tide and more recoveries than new infections.

The UST 10yr yield is unchanged at 0.69% although it has been unusually volatile in the past 24 hours. Their 2-10 curve is stable at +53 bps. Their 1-5 curve is up marginally at +17 bps, while their 3m-10yr curve is unchanged at +61 bps. The Aussie Govt 10yr yield is up +1 bp at 0.93%. The China Govt 10yr is also up +1 bp at 3.07%. And the NZ Govt 10 yr yield is following for a change, up +3 bps to 0.58%.

The price of gold has risen overnight, up +US$26 to US$1,946/oz.

Oil prices are essentially unchanged overnight at just on US$43.50/bbl in the US while the international price is just over US$45.50/bbl. But the US Gulf hurricane could upend markets quickly.

And the Kiwi dollar is much firmer this morning, up +½c to 66.1 USc. Against the Australian dollar we are firm too, at 91.4 AUc. Against the euro we are more than +½c at 55.9 euro cents. That means our TWI-5 is up to 69.1 and a two week high.

The bitcoin price is up +1.7% from this time yesterday at US$11,466. 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 ».