Here's our summary of key economic events overnight that affect New Zealand, with news American investors have taken fright again.
A new report out overnight says that globally, labour income has fallen almost -11%, or US$3.5 tln, in the first three quarters of 2020, compared with the same period in 2019. But the figure excludes income support provided through government measures. Given the annual world GDP is US$80 tln the hard knock to worker incomes will take nearly -6% off that in 2020 and severely crimp demand.
And the clear resurgence of the pandemic in the US and Europe is telling markets we are a long way from beating the disease with current policies. Wall Street has taken fright again and is down sharply.
And US Fed officials testifying in Congress called for more fiscal support. They said the American economy is in need of more government spending to avoid a pandemic relapse in their economy. That support is unlikely to come from the Congress however.
However overnight there were a series of flash global PMIs released for September and they were generally positive. The US factory PMI expanded at a similar rate to August at 54. Their services PMI is expanding very similarly. But those surveyed aren't especially optimistic it will last.
In Japan, there was little change from August as well but that leaves the September results for both factory and services contracting. However they reported business sentiment appears to be improving.
In the EU, they report a stagnation, but at least it isn't a contraction.
The Australian PMI also reported a stagnation for services (undercut by Victoria) but a good expansion for manufacturing. But they also noted it is a burst that may "lack legs".
In Japan they are about to relax visitor entry rules from early October.
In China, they are also relaxing border rules and about to allow re-entry of people with valid residence visas. They have been excluded for six month as part of their pandemic restrictions.
The size of China's grain shortfall has been revealed in August Customs data released overnight. They brought in more than 1 mln tonnes of corn in the month, up +12% from the previous month and nearly five times higher than the volume recorded in the same month last year. Purchases at this level distort global food prices. And it is likely to extend for a long time yet.
In Australia, new budget rules are about to be unveiled allowing small businesses at risk of collapse to trade while insolvent, in a US style bankruptcy status, to help some of them recover.
In New York, the S&P500 is down more than -2.2% in early afternoon trade and another large retreat. They follow European markets that were generally higher by about +0.6%. Yesterday Shanghai ended its session up +0.2% and Hong Kong was up +0.1%. Tokyo was down just -0.1% which meant it missed the large falls of earlier in the week. The ASX200 ended up a strong +2.4%, and the NZX50 Capital Index ended up +0.8%.
The latest global compilation of COVID-19 data is here. The global tally is 31,714,000 and up +304,000 in one day. Global deaths now exceed 973,000.
Just under a quarter of all reported cases globally are in the US, which is up +54,000 overnight to 7,113,000. The number of active cases are stable at 2,540,000 so they have as many new cases as recoveries and making no progress. Their death total is now just over 206,000 and back rising at +1000 per day.
In Australia, there have now been 26,973 COVID-19 cases reported, and that is only +31 more cases from yesterday. Deaths are up slightly at 859 (+4). Their recovery rate is now just on 90%.
The UST 10yr yield is up +2 bp at 0.68%. Their 2-10 rate curve is up slightly at +55 bps, their 1-5 curve has steeped marginally to +15 bps, while their 3m-10 year curve is also steeper at just on +60 bps. The Australian Govt 10 year yield is down -4 bps at 0.86%. The China Govt 10 year yield is also lower at 3.11% and a small -1 bp dip. And the New Zealand Govt 10 year yield is also down a sharp -4 bp at 0.48% and if that holds will be a record low, beating the mid-May crash.
The price of gold will start today down sharply by a large -US$51 at US$1855/oz. Silver is down a massive -7% overnight.
Oil prices have inched up in a minor way and are now just under US$40/bbl in the US, while the international price is marginally firmer at just on US$42/bbl.
The Kiwi dollar starts today lower again at 65.4 USc and another -1c slip retreat. We are now at a one month low. Against the Australian dollar we are softish at 92.4 AUc. Against the euro we are definitely softer at 56.1 euro cents. That means our TWI-5 has retreated to 69.1.
The bitcoin price is virtually unchanged today from this time yesterday, and at US$10,464. 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 ».