Here's our summary of key economic events overnight that affect New Zealand, with news tensions with China are ramping up.
China is reported to have suspended imports of Australian coal in what is being seen as punishment for the Aussie's independent and critical positions taken on China's security, human rights and virus responses. A lot is at stake here. Coal exporters are China's 'friends' in Australia so it is a big move. Chinese power stations and steel mills have reportedly been told verbally to stop using Aussie coal, and port officials have been told to stop unloading. Australia exports about 4 mln tonnes of high-grade coking coal per month to China, a trade worth about NZ$8 bln per month.
In Japan, data out for machine tool orders for September was encouraging, rising +24% from August to be just -15% lower year-on-year. That is a big recovery in one month and is largely based on export growth. More general machinery orders are showing a similar recovery.
In England, their central bank has only just written to its trading banks asking if they are ready for negative policy interest rates. It will undoubtedly take them some considerable time to prepare. It is a preparation New Zealand started earlier this year.
Wall Street has opened up +2.0% to start their week on a positive note, but driven by stimulus expectations. Overnight, European equity markets were generally up about +0.6% (although London fell -0.3%). Yesterday Shanghai finished on a high, up a very strong +2.6% with Hong Kong not far behind, up +2.2%. Tokyo didn't share in these gains and fell -0.3%. Closer to home, the ASX200 was up +0.5% on the day while the NZX50 Capital Index ended up +0.6%.
Two Stanford University academics who designed the behavioural math behind a new way to run complex public auctions will share the 2020 Nobel Prize in economics. Theirs is a basis that has been widely applied for events like auctioning mobile phone spectrums, aircraft landing slots, fishing quota, and many environmental resource allocations.
The latest global compilation of COVID-19 data is here. The global tally is 37,615,000 and up at a faster pace of +314,000 in one day. The European second wave is particularly tough on the UK, France and Russia. Italy is being hit too. Global deaths reported now exceed 1,078,000 (+4,000) but clearly many are going unreported.
The largest number of reported cases globally are still in the US, which is up +39,000 in one day to 8,002,000. The number of active cases is at 2,644,000 so as many new cases as recoveries and not making real progress yet. Their death total is over 220,000 and still rising at +1000 per day.
In Australia, there have now been 27,286 COVID-19 cases reported, and that is +22 more cases than we reported yesterday. Deaths are unchanged at 898.
The UST 10yr yield is unchanged at 0.78% this morning. Their 2-10 rate curve is unchanged at +62 bps, their 1-5 curve is also stable at +21 bps, while their 3m-10 year curve is little-changed at +68 bps. The Australian Govt 10 year yield will start today at 0.85%. The China Govt 10 year yield is marginally firmer at 3.21%. The New Zealand Govt 10 year yield is up +3 bps at 0.58%.
The price of gold is down -US$9 this morning and now at US$1922/oz.
Oil prices are down by about -US$1.50 today, now just over US$39/bbl in the US, while the international price is down a bit less to just over US$41.50/bbl. The prospect of large new supply hitting the market, especially from Libya, is behind today's fall.
The Kiwi dollar starts today marginally lower at 66.5 USc. Against the Australian dollar we are holding at 92.2 AUc. Against the euro we are at 56.3 euro cents. And that means our TWI-5 is little-changed at 69.6.
The bitcoin price is higher yet again today, now at US$11,563 and +1.4% higher than this time yesterday. 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 ».