US retail and jobs data weak; Canada holds rate; Japan machine tool orders stabilise; Chinese inflation cools; Australian consumer confidence rises; UST 10y at 0.71%; oil down and gold up; NZ$1 = 66.7 USc; TWI-5 = 69.8

US retail and jobs data weak; Canada holds rate; Japan machine tool orders stabilise; Chinese inflation cools; Australian consumer confidence rises; UST 10y at 0.71%; oil down and gold up; NZ$1 = 66.7 USc; TWI-5 = 69.8

Here's our summary of key economic events overnight that affect New Zealand, with news volatility continues to stalk markets - and economies.

American mortgage applications rose +3% last week, reversing the prior weakness.

Retail sales in the US took a surprising retreat last week, down -1% when a good rise was expected. They are now lower than for the same period in 2019. It's a minor fall on that basis but a more important turnaround from last week's positive year-on-year position.

The increase in the number of job postings, a real-time measure of labour-market activity, has slowed dramatically since late July, and last week stood about -20% below 2019 levels. That is updated data on the official JOLTS data for July which recorded a good rise from depressed June levels.

The Bank of Canada has held its policy rate unchanged at +0.25% although it did more to tweak its QE program a little to make it a bit more accommodative.

Japanese machine tool orders in August came in better than the prior month. Even though they were down -23% year-on-year, that pulls back some earlier month declines with only a small -2.3% month-on-month dip and export orders now show virtually no decline.

In China, the American Chamber of Commerce Shanghai’s annual member survey shows US firms are adapting to the volatile geopolitical situation. While hardly any are planning to leave China, a third have found it difficult to retain Chinese staff due to the US-China tensions. What they say they really want is sensible policy from Washington. And they say if they are banned from using WeChat, that could be 'devastating' for their operations there. Overall, the survey was gloomier for their members than the one last year.

China's consumer price inflation eased a little in August, mainly because food prices grew at a slower pace. But beef and lamb prices are still rising faster than most.

China's industrial price deflation is also easing, with three consecutive months of month-on-month rises.

China's overland train trade with Europe is booming with a +62% year-on-year rise to 1,247 trains, a record high for the second straight month.

In Australia, much is being made of consumer confidence “roaring back”. But actually, that is only in the perspective of the last six disastrous months. In fact, consumer sentiment remains very negative across the ditch according to the Westpac MI survey.

And in an attempt to shore up their declining credit card business, NAB has introduced a no-interest Visa credit card although it does have a fixed fee of between AU$10 and AU$30 per month depending on the credit limit you choose.

Wall Street is roaring back today, making up yesterday's losses. The S&P500 is up +2.4% so far today but still not quite back to where it closed on Friday. The NASDAQ is up +2.7% and only making back just over half of yesterday's losses. Overnight, were up about +1.8% on average. Yesterday, Shanghai closed down -1.9%, Hong Kong was down -0.6% and Tokyo was down -1.0%. The ASX200 closed down -2.2% and the NZX50 Capital Index was down -1.3%.

The latest global compilation of COVID-19 data is here. The global tally is not available from this source today, but seems to be +247,000 higher in a day (another source) which would take the global total to 27,648,000.

Just under a quarter of all reported cases globally are in the US, which is up +31,000 to 6,528,000 and a relentless rise. Their death total is now 194,500 and still rising at about +500/day (587/mln and +1 from the prior day).

In Australia, there have now been 26,465 COVID-19 cases reported, and that is +91 more cases overnight and clearly the Victorian emergency easing. But there were +9 in NSW yesterday and +8 in Queensland. Deaths however have now topped 781 (+11). Their recovery rate is up to 86% now.

The UST 10yr yield is up +3 bps and now at 0.71%. Their 2-10 rate curve is now at +55 bps, their 1-5 curve is at +14 bps, while their 3m-10 year curve is now at +61 bps. The Australian Govt 10 year yield is +2 bps higher at 0.93%. The China Govt 10 year yield is now at 3.11% and that is -4 bps lower in a day. The New Zealand Govt 10 year yield is now at 0.57% and unchanged.

And we should note that New Zealand wholesale rates turned negative yesterday and ended the day at zero.

The price of gold is up another +US$7 and now at US$1,946/oz.

Oil prices are lower today, down to just over US$38/bbl in the US while the international price is down to just over US$41/bbl.

The Kiwi dollar is firmer today and now at 66.7 USc and recovering nearly +½c overnight. Against the Australian dollar we are firmer too at 91.8 AUc. Against the euro we are up at 56.6 euro cents. And we had some good gains against the yen and British pound. That means our TWI-5 has risen +40 bps to 69.8.

The bitcoin price is a little firmer today, up by +1.1% to US$10,280. 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 ».

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60 Comments

"Wall Street is roaring back today..."
Haven't we been here before?
7th Sept 2008, the US GSE's, Freddie and Fannie, were on the brink. The Fed stepped in and we were saved! The markets roared back. 2 weeks later Lehman went down and the rest is history.
Today it's not the GSE's but Tech Stocks.
Interesting times ahead.....

And how much higher are the markets today than they were after the crashes in 1987 and 2008?

leverage ring a bell

https://www.4philosophers.com/wp-content/uploads/2020/02/20200202-Intere...

theres was plenty of road back in 87 ... some left in 08

Well FTSE is at the same level now as it was in 1998, and below it's 2008 highs. Nikkei is also below it's position in 1991. ASX is also below it's position in 2007.

Bank treasurers can borrow wholesale at 0.0025% so why would they want to offer retail savers anything?
Which begs the question - why would wholesale lenders even bother?
From the RBA:

Deposits and money are primarily born of credit
Measures of money grew strongly over March and April this year, reflecting growth in deposits at authorised deposit-taking institutions (ADIs; Graph D.1). Deposit and money growth are typically driven by new lending by the banking sector. Lending creates deposits as the funds made available to a borrower find their way into a deposit somewhere in the banking system, either as a deposit in the borrower’s account, or in another account when the borrower uses those funds to make a purchase.[1] Link

Asset bubbles disproportionately benefit the rich.

12
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Donald Trump has been nominated for a Nobel Peace Prize.

First US President in 39 years to not start a war, or join another countries war.

What happened to WW3 that the media warned us about when we was elected?

11
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This is the guy who did not know Britain had nukes. He is not allowed to make the big calls...they just distract him with mirrors and tv's in every room.

24
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I think he is the first president in a while that wasn't owned by some special interest group that helped shoe horn him into Govt. Democrats are the party of the ruling elite, they used to be the party of the working man but those States were all red last election. Bit like labour is more and more the party of the well off left leaning middle class, with no idea what it's like at the bottom of the pile, or if they notice it's all lip service.

You are 100% correct Sir.

Yes he's a shocker but what really sticks out is how the Democrats have failed in several sustained bids to remove him despite mobilizing the global press against him. If they can't get rid of Trump, they can't run the country.

Trumps is falling behind in the polls and he knows it, literally everyday now there are further allegations of how incompetent he is as a president. And the biggest one of all is how badly he blatantly messed up the handling of the coronavirus. Over a thousand people a day are dying of Covid-19 in the US, they're now over the 195,000 and will be 200,000 by the election.

BBC Trump deliberately played down virus, Woodward book says. "Trump knew Covid-19 was deadlier than the flu before it hit the US but wanted to play down the crisis, according to a new book." https://www.bbc.com/news/world-us-canada-54094559

I hope that Trump dose loose, it would create the perfect storm for me. Dem's running the US and Labour running the show here will only esulate the economic downward spiral and the reset.
The Trump is bad naritive is getting old, as Masher asked above 'where is WW3 that the Dem's tried to push that Trimp would start'?

Trump will keep proving you wrong by adding more chaos as he always does. I'm sure most good Presidents would condemn being nominated by a Far-right member but no not Trump.
From Politico: "On Wednesday, Trump vigorously promoted the news that he had been nominated for the prize, tweeting at least 17 times in less than a half-hour about his candidacy for the prestigious commendation." https://www.politico.com/news/2020/09/09/trump-nobel-peace-prize-410761

Trump will continue to wave one hand arround to distract everyone from what the other hand is doing. That is what he dose.

Yes and the good news is that most American's do recognize that is all Trump can do. He has no policies what so ever, he can't even promote 'The Wall' anymore since that was an farce where his cronies ripped off the American people to gain profits for themselves.

RNZ: Steve Bannon charged with fraud over Mexico wall funds. "Bannon and three others defrauded hundreds of thousands of donors in connection with the "We Build the Wall" campaign, which raised $US25m, the US Department of Justice (DoJ) said." https://www.rnz.co.nz/news/world/424057/steve-bannon-charged-with-fraud-...

V the Dem's... are you seriously saying that the Dem's are pure? ... We only need to mention Hillary Clinton as a shining example of corruption.
Trump is only a sliter of the level of corruption that the Democratic party has. If you want to point the finger make sure your own party is blameless.

Probably since Eisenhower who would have won, given his prestige, for either party. As it was Truman’s Democrats were becoming undone by corruption. Before that well, Teddy Roosevelt went hard against the establishment and industry monopolies, and well before that Andrew Jackson was foremost his own man and to hell with anyone else. Rest of them though just about all party products. But compared to each and every other president Trump is certainly something else again. Virtually unfathomable.

Sheldon Adelson to donate $100m to Trump and Republicans, fundraisers say

Billionaire casino magnate, a staunchly pro-Israel conservative, expected to give to Super Pacs and ‘dark money’ groups

He also brokered peace deals between Kosovo & Serbia and UAE & Israel in the last fortnight.

Facts vs some disgruntled ex-employees allegations in a book. Cool.

Masher you might want to actually understand who has nominated Trump. Far-right Norwegian politician nominates Trump for the Nobel Peace Prize.
Just shows how desperate Trump is to make himself look good. There's not a cat in hell's change that Trump would ever get the Nobel Peace Prize. Not with 195,000 dead American from the coronavirus.

From Politico: "On Wednesday, Trump vigorously promoted the news that he had been nominated for the prize, tweeting at least 17 times in less than a half-hour about his candidacy for the prestigious commendation." https://www.politico.com/news/2020/09/09/trump-nobel-peace-prize-410761

He would have had a chance at controlling it if the Dem Mayor of NY hadn't dropped the ball and the Dem's promoting BLM protests that sent the infection numbers into hyper mode.
Mate you seam to have one thing on your mind and that is 'Trump is bad', you need to step back and take a look at the alternative, they are as bad or worse.

Really, he himself brokered those?

What was his involvement?

He told his staff to sort it. Let's face it, if the election result was the other way around the last four years would have been war, war and more war.

Not disagreeing; but what wars did Obama start or join in on? (he got handed Afghanistan and Iraq) and the same for Clinton?

16
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Libya he had a hand in, Syria too.

If just supporting one side or the other qualifies as guilt then surely Trump is guilty too?

Besides in Libya, wasn't the US Embassy attacked first? Syria was a continuation the the Iraq conflict as the insurgents crossed the border, but that was started by Assad attacking his own people? Can we claim to be guilt free when we stand by and do nothing when innocents are attacked?

Plus you forgot to mention this;"Obama slashed the number of U.S. troops in war zones from 150,000 to 14,000, and stopped the flow of American soldiers coming home in body bags. He also used diplomacy, not war, to defuse a tense nuclear standoff with Iran" What else could he do? Abandoning Afghanistan or Iraq could potentially leave a significant power vacuum that could result in something far worse than what was before.

A part of this discussion should also be just what the President can do or avoid. Eisenhower in his retirement speech warned of the Military Industrial Complex and its influence at the highest levels in Washington. I suspect that many presidents get captured by fait accompli , and have little choice. But a few like Bush Jr are truly stupid.

I guess the best thing would be for the Americans to realise just how damaging their adventurism is in the name of their 'national interest' to the rest of the world and just back off and let the rest of the world sort it's own shit out. But can that actually happen now with all that is happening?

We stood by when Mugabe destroyed Zimbabwe?

Here.

U.S. military forces have been at war for all eight years of Obama’s tenure, the first two-term president with that distinction. He launched airstrikes or military raids in at least seven countries: Afghanistan, Iraq, Syria, Libya, Yemen, Somalia and Pakistan.

https://www.latimes.com/projects/la-na-pol-obama-at-war/

And this in the face of smooth words x2, two times promising peace.
P1. Before he took office in 2008, Barack Obama vowed to end America’s grueling conflicts in Iraq and Afghanistan.
P2. During his second term, he pledged to take the country off what he called a permanent war footing.

M86,& what wars did he stop.

There is no doubt he got handed a pup with the Afghanistan conflict, but he neither started it nor joined it, and Pakistan was a part of that conflict. Yemen and Somalia though different kettle of fish?

What do you mean neither started or joined, he carried it on for 8 years, while promising to end war twice.

How did you reconcile that the military action in S & Y are different to military action.
Why degrade, downplay the death & destruction by kettle of fish turn of phrase.

Yes He carried it on. I'm not disagreeing with you. You're splitting hairs. But he didn't start it, he inherited it from his predecessor, you know the one who started it.

And i don't reconcile S & Y, I said they are a different kettle of fish. I asked the question, hence the ? at the end. How are they involved and engaged in those two?

Do you like being adversarial, when a discussion could be a lot more meaningful?

It's very funny to read the posts of someone who's just has their whole fake reality perceptions torn away by simple facts.

Trump has also continued those wars, after vowing to bring the troops home he actually increased the numbers in Afganistan. He also pulled out out of the pact with Iran, and tried a war by assasinating their military leaders.

In my books neither Obama nor Trump have started any wars, they've just continued what was already there.

After destabilizing the country for years and then adding military conflict, exiting and leaving the country in turmoil is hard.
Wasn't it Obama started Sryia 2011?
I find that the worst case of starting a war by destabilizing and then stealing their oil to fund it. The convoys of oil tankers heading out of the country with Israel the biggest buyer. The States sat back and dropped panflets and allowing the militants to gain further control of the country so they could further encircle Russia with more US bases. The domanace of the Russia forces ability over the US capabilities was clear and IMO it was about then that the world started to take less notice of the US.
You can bet your bottom dollar that Hillary was in the thick of that and pocketing billions on the side.

Not sure "not starting a war" should be qualification to win a Nobel Peace Prize! Although for an American President, it is quite an achievement...

Up against Jacinda and well at Greta. Trump is an outsider according to the odds, but probably will win by pulling strings...

...he's started a civil war instead.

how so?

....in Democrat run cities.

See you've just pointed out that you're a hypocrite Masher.

It was the Democrats that started the roits.

"Peaceful protesters"

- CNN

A whole term of the US Democrat Party playing games and Trump still managed to deliver on quite a few objectives. If they do get in, we'll see first hand that they only have one thing in their heads and that is to get rid of Trump.
Obama the great hope for change and two terms of nothing..

This is the same guy that just yesterday recommended to his supporters that they form Vigilante gangs and stand around outside the polling booths to make sure that ""voters were doing the right thing""

. double post

Although he did assassinate an Iranian general for her personal political gain.

Its September now, not February, not March.

https://www.tvnz.co.nz/one-news/new-zealand/plan-b-epidemiologist-calls-...
Watch this, then watch a 2nd time with sound down Jack Tame is too funny, manic in fact.
- mind not impressed Jack tries to tell Dr Thornley that he, the Dr is not qualified.
- Jack also unhappy his own earlier comments referred to.

https://youtu.be/jFRR58D1oW0
Prof Karl Sikora.

Time moves on, we know more stuff.

I suspect our govt. strategy is more to do with re-election than do with how best to deal with the situation in the long term. Hopefully they will take a longer term view after the election.

Hopefully they start with baby steps and try to leave their lack of delivery behind them. I dont see it happening as they are champagne socialists now days with a disconnect to their traditional voter base.

Some simple actions people can do to reduce the impact of a Covid-19 infection
https://thefatemperor.com/ep94-how-to-address-immune-function-to-beat-vi...

I found this one quite useful too: The Ultimate Guide to Homemade Face Masks for Coronavirus. https://smartairfilters.com/en/blog/best-diy-coronavirus-homemade-mask-m...

Unfortunately, the scientific evidence regarding the usefulness of wearing masks outside a medical setting is not very strong and it can actually be detrimental as it is more difficult for one to breathe so I would not rely on this to help much.

this is bullshit misinformation and logically corrupt - how do masks only work in a medical setting?

i agree with him, masks are mostly likely useless.

If you use them correctly and they are of a good standard, they would stop the aerial infection by a good deal. From what I see on the TV and here in NZ people aren't useing them to their full capacity, ie. Only over their mouth, not pinching the wire to the bridge of the nose, removing the mask with your hand and not sanitizing your hand afterwards. Etc.
I use them with work on building sites and previously with Orchard spraying. They worked when you used them correctly.

In a hospital setting, masks are just one tool that health care specialists use for hygiene and infection control. Pathogens use many vectors to spread including indirect contact via surfaces. I think it is very reasonable to doubt the effectiveness of masks alone in an uncontrolled environment.

the efficacy of masks in limiting the spread of an airborne virus is well documented - I'm not really interested in labouring the point but would like to see your studies which conclude with "most unlikely" in this regard.

https://www.ucsf.edu/news/2020/06/417906/still-confused-about-masks-here....

Sure, I like to follow Ivor (the fat emperor) because he usually makes science accessible for laymen like myself. His most recent post is quite technical but nevertheless worth watching. It looks and analyses the statistical data we have accumulated so far to quantify the effectiveness of wearing masks and lockdowns on Covid19.
https://www.youtube.com/watch?v=8UvFhIFzaac&t=1698s&ab_channel=IvorCummins