Here's our summary of key economic events overnight that affect New Zealand, with news we are moving to an era of chronic economic under-performance.
American jobless benefit claims for last week came in slightly higher than expected and the prior week's totals were also revised higher. These new higher claims offset those at the end of their qualification for benefits and has kept the numbers on benefits little-changed. All this is worse than expected and Wall Street turned from positive to negative territory on the news.
American manufacturers are now de-stocking. What started out looking like tight management of inventory levels is turning into a defensive de-stocking trend with durable goods manufacturers now holding -7.5% lower stocks that a year ago. This is substantial and inhibiting new orders. It is particularly fierce in the car, furniture and office equipment industries where levels are -10% to -15% lower.
US mortgage rates have hit new all-time lows with the standard 30 year now at just 2.86% plus points, and the 15 year at just 2.37% plus points.
Japanese machinery orders rose in July after falling to a very low level in June (up +6.3%). That July rise is encouraging because the export order rise (+13.8%) was bigger than expected. (This data is different and broader than the improving machine tool orders we reported yesterday.)
In Indonesia, two key metrics are stumbling. First, retail sales are not recovering as they hoped, and secondly, consumer confidence is seriously lagging. Both point to severe economic stress on the way there, and that will worry its southern neighbour.
At the overnight European Central Bank meeting, they left all their key settings unchanged but of course that is continuing to add large financial system liquidity each month under their new emergency settings.
Wall Street opened with a carryover of yesterday's enthusiasm, but that has leaked away on the jobless claims data and the S&P500 is down a sharp -1.4% in mid afternoon trade and the decline is accelerating. Overnight, European markets were down about -0.4%. Yesterday, Shanghai and Hong Kong each shed -0.6% but Tokyo gained a creditable +0.9% on the day. The ASX200 ended up +0.5% and the NZX50 Capital Index was up +0.6%.
The latest global compilation of COVID-19 data is here. The global tally is 27,961,000 and up +313,000 higher in a day. Global deaths now exceed 905,000.
Just under a quarter of all reported cases globally are in the US, which is up +33,000 to 6,561,000 and a relentless rise. Their death total is now 195,800 which is up more than +1000 in a day (591/mln and closing in on the Brazilian level).
In Australia, there have now been 26,513 COVID-19 cases reported, and that is only +48 more cases overnight and clearly the Victorian emergency is easing. Deaths however have now topped 788 (+7). Their recovery rate is up to almost 87% now.
The UST 10yr yield is down -2 bps and now just under 0.69%. Their 2-10 rate curve is unchanged at +55 bps, their 1-5 curve is at +13 bps, while their 3m-10 year curve is now just under +60 bps. The Australian Govt 10 year yield is down -1 bp at 0.92%. The China Govt 10 year yield is unchanged at 3.11%. The New Zealand Govt 10 year yield is now at 0.62% and that is +5 bps higher since this time yesterday.
The price of gold is up another +US$10 and now at US$1,956/oz.
Oil prices are lower again today, down to just over US$37.50/bbl in the US while the international price is down to just over US$42/bbl. This is now a new decline that may knock the US domestic fracking industry out altogether.
The Kiwi dollar is unchanged today and still at 66.7 USc. Against the Australian dollar we are marginally softer at 91.6 AUc. Against the euro we are much softer at 56.2 euro cents. That means our TWI-5 has dipped to just under 69.7.
The bitcoin price is a little firmer again today, up by another +1.0% to US$10,378. 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 ».