Here's our summary of key economic events overnight that affect New Zealand, with news there are some positives to report today, but they may well be just temporary.
This weekend the August non-farm payrolls report for the US will be released and analysts are expecting a gain of +850,000 jobs in the world's largest economy comes back from the pandemic downturn. That will be far less than the +1.4 mln gained in July. Today, the precursor ADP employment report was released suggesting private payrolls rose +749,000 which was better than analysts expected. But some of that may be a make-up from a low July result which greatly undershot the July non-farm payrolls level.
It is fair to wonder if these gains will last. For example, Disney has announced huge layoffs mostly in its theme parks, about 20% of those workers many of which are part-time or minimum wage employees. Shell Oil said it will cut up to 9000 jobs.
There was another real estate market report showing the American housing market was strong in August. Pending home sales were a spectacular +24% higher than in the same month in 2019. And that is a record high. And "home prices are heating up fast" in US markets says an industry analyst. And recent mortgage applications are similarly high on a year-on-year basis.
Also rising is the latest Fed regional factory survey, this one from the Midwest industrial heartland. But they are just getting a later bounce-back than the rest of the country.
Also on the up, China's manufacturing economy retained strong growth momentum in September, with firms signaling further good increases in production and new orders. New business expanded at the strongest rate since January 2011, aided by a solid rebound in export sales.
And China said its foreign debt has now risen to US$2.1 tln. Given that 2020 GDP will come in at US$14.4 tln, that means their foreign debt load is less than 15%.
And don't forget, China is now in its Golden Week holiday, so economic news from them will be sparse for a while.
Hong Kong's August retail sales were down -13% from the same month a year ago and that was a much lesser shortfall than we have seen recently and activity is now back up to April levels.
Residential building consent approvals were also out in Australia for August today and they were little-changed from August 2019. But that was an unusually low benchmark. Still house consents were up strongly (+12%), undercut by a big dive in apartment consents (-18%).
August air cargo volumes rose in August from July but growth was hampered by lack of capacity. That was because the passenger market is still moribund. The Asia/Pacific international cargo shipments were down more than -18% from the same month in 2019.
Wall Street has started today up a strong +1.2% in midday trade, reversing yesterday's decline. The expectation of new fiscal stimulus is behind today's rise. European markets closed down about -0.5% however. Shanghai closed yesterday down -0.2%, Hong Kong closed up +0.8%, and Tokyo ended its session down a sharp -1.5%. The ASX200 closed even lower, down -2.2% while the NZX50 Capital Index had a flat result, 'good' in the circumstances.
The latest global compilation of COVID-19 data is here. The global tally is 33,743,000 and up +299,000 in one day. The European resurgence is gathering steam again, nor the one in the US. Global deaths reported now exceed 1,003,000 but clearly many are going unreported.
The largest number of reported cases globally are still in the US, which is up +47,000 overnight to 7,421,000. The number of active cases are stable at 2,539,000 so as many new cases as recoveries and making no real progress. Their death total is now just over 211,000 and rising at +1000 per day. At 637/million population, it is the worst western death rate bar Belgium and Spain.
In Australia, there have now been 27,078 COVID-19 cases reported, and that is only +15 more cases than yesterday. Deaths are up however at 886 (+4). Their recovery rate is now 91%.
The UST 10yr yield has risen today, up to 0.69% and almost a +5 bps gain. Their 2-10 rate curve is steeper at +56 bps, their 1-5 curve is also marginally steeper at +16 bps, while their 3m-10 year curve is also steeper at +62 bps. The Australian Govt 10 year yield is up +4 bps unchanged 0.88%. The China Govt 10 year yield is up +2 bps at 3.16%. And the New Zealand Govt 10 year yield is up +5 bps at 0.51%.
The price of gold is unchanged at US$1895/oz. But silver has slipped a little today.
Oil prices are firmer today, up by more than +US$1 to just under US$40/bbl in the US, while the international price is not much changed at just under US$41/bbl.
The Kiwi dollar starts today higher yet again, now back up to at 66.2 USc and a nine day high. But against the Australian dollar we have hardly moved and are now at 92.4 AUc. Against the euro we are +40 bps firmer at 56.5 euro cents. And that means our TWI-5 has risen to 69.6.
The bitcoin price is a little higher this morning, and now at US$10,782 and a +0.9% gain. 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 ».