Here's our summary of key economic events overnight that affect New Zealand, with news food prices are now expected to rise as northern hemisphere drought conditions have capped their growing season.
But first, the latest Beige Book summary of regional Fed economic activity is sombre reading. Only "slight to modest" expansions are now being recorded in all Districts as their rebound fizzles out. They are seeing more activity in housing markets however. But employment growth is low they say. Apart from warehousing, commercial real estate markets are in trouble, and their drought is bringing mixed rural conditions. Bankers are saying delinquency rates are expected to rise, although that hasn't happened yet.
US home loan originations are running hot and expected to swell to US$3.2 tln this year, the most since the unusual US$3.8 tln in 2003. Record low interest rates are driving a surge in refinancing and purchases. Housing activity has soared since the onset of the pandemic, driven by both those low interest rates and a desire to have more space to quarantine.
US stimulus negotiations are still inching forward between the Democrats and the White House - even as the Republican Senate vows to block any new spending. A lot of Wall Street positioning is based on them succeeding.
Canadian retail sales growth in September disappointed with a +0.4% rise over the prior month, showing their pandemic rebound has been exhausted. Markets had expected a +1.1% rise over August. Online sales account for only 5% of Canada's retail trade. Year-on-year, retail sales are up +3.5%.
In Hong Kong, Cathay Pacific airlines is cutting -8500 jobs region-wide in an emergency effort to stay afloat.
Meanwhile, the Chinese yuan has appreciated by nearly +2% since their Golden Week holiday.
Globally, wheat prices are at record levels. Two factors are at play here; many countries are stockpiling the essential commodity as the pandemic causes incomes to fall and social pressures to rise, just at the same time as dry growing conditions around the world, especially in the US and Russia, are expected to limit output this year. The combination is making things tough for the developing world especially. One beneficiary of this is Australia where very favourable growing conditions point to a record harvest.
Wall Street has started today with the S&P500 unchanged in early afternoon trade. Overnight European markets fell sharply by an average of -1.5%. Yesterday, Shanghai ended its Wednesday session unchanged, Hong Kong ended up +0.8%, and the large Tokyo exchange was up +0.3%. The ASX200 ended up +0.1% while the NZX50 ended down -0.2%.
The latest global compilation of COVID-19 data is here. The global tally is 40,932,000 and up +382,000 in one day. It is first-world countries that seem to be having the most difficulty containing the new wave. Global deaths reported now exceed 1,127,000 (+7,000 per day).
The largest number of reported cases globally are still in the US, which rose +59,000 in yesterday's update to 8,531,000. They are clearly now in a third wave (initial was in April, then a larger one in July, and this new one threatens to be larger again). The number of active cases is at 2,750,000 so many more new cases than recoveries. Their death total is over 226,000 and still rising at +1000 per day.
In Australia, there have now been 27,444 COVID-19 cases reported, and that is +14 more cases than we reported yesterday and most of these new cases in NSW. Deaths are unchanged at 905.
The UST 10yr yield is firmer again this morning by +2 bps at just on 0.81%. Their 2-10 rate curve is steeper at +65 bps, their 1-5 curve is also steeper at +22 bps, along with their 3m-10 year curve, now up at +73 bps. The Australian Govt 10 year yield will start today with a +4 bps rise at 0.80%. The China Govt 10 year yield is unchanged at 3.22%. And the New Zealand Govt 10 year yield is up +5 bps at 0.59%.
The price of gold is up from this time yesterday up +US$14 and now at US$1924/oz.
Oil prices are lower today, down -US$1 to just under US$40/bbl in the US, while the international price is now just on US$41.50/bbl.
The Kiwi dollar starts today more than +¾c higher at just over 66.7 USc, making back all of yesterday's dip and more. Against the Australian dollar we are a little firmer too at 93.5 AUc. Against the euro we have risen +½c to 56.2 euro cents. And that means our TWI-5 is up at 69.7.
The bitcoin price is a very sharp +7.4% higher today than this time yesterday, now at US$12,847 and a 15 month high. An embrace by PayPal is driving this rise. 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 ».