Here's our summary of key economic events overnight that affect New Zealand, with news rising house prices are becoming a signature global consequence of all the pandemic stimulus.
But first in the US, new unemployment benefit claims for last week came in quite a bit lower than expected at +787,000 when +860,000 was anticipated. But qualifications of those on these benefits is expiring much faster now. Last week, -1,024,000 people fell off these state programs. True, some will have found jobs but most will have seen their qualification expire. This is the second consecutive week where the fall exceeded -1 mln people.
Meanwhile, the American housing market is on a tear and to a 14 year high. Sales of existing homes in September rose +21% when compared to the same month a year ago, up 9.4% from August and much more than was expected (+5%). The median price rose to $311,800 (NZ$467,000) and that was up +15% in a year and an accelerating gain.
And the Kansas City Fed regional factory survey reported rising activity, but their activity index is still -12 points lower than at this time last year. At the same time, the shifting of manufacturing jobs to Mexico is gathering pace under the new-NAFTA, and companies controlled by billionaire Commerce Secretary Wilbur Ross are joining the trend out. This is more clear evidence a tariff war is a losing proposition.
China has signaled that it is getting ready to ramp up investment outside the country now that foreign assets are less expensive due in part to the international situation, and part due to the appreciating yuan.
Taiwan reported its September unemployment rate overnight and it was little-changed at a very low 3.8%.
Hong Kong reported its inflation rate overnight and they revealed deflation at a surprisingly level of -2.2%. But that was due mainly to a waiver of rents for low income families as the Government there tries to keep a lid on social unrest.
Regarding Malaysia, the local Goldman Sachs subsidiary has plead guilty in US court proceedings to its part in the 1MDB fraud committed with the previous Prime Minister. It has agreed to pay US$2.8 bln in penalties. That now adds up to about US$5 bln in penalties among many worldwide jurisdictions for these crimes. (The transaction that led to all this action netted Goldman about US$600 mln in fees.)
Consumer confidence in the EU turned down again in October, no doubt due to the worsening prospects as their pandemic bites with renewed vigour. That is very noticeable in Germany but will be mirrored in most others.
In Australia, mass uptake of rooftop solar (PV) systems coupled with changes in energy use due to the COVID-19 pandemic reduced national electricity demand in the third quarter of 2020. The Victorian lockdown was also a major factor. As a result, prices fell.
Wall Street has started today with the S&P500 up +0.5% in early afternoon trade as there is more confidence their stimulus talks will amount to some action. Overnight European markets were flat. Yesterday, Shanghai ended its Wednesday session down -0.4%, Hong Kong ended up +0.1%, and the large Tokyo exchange was down -0.7%. The ASX200 ended down -0.3% while the NZX50 ended down -0.2%.
The latest global compilation of COVID-19 data is here. The global tally is 41,397,000 and up a record +465,000 in one day. It is first-world countries that seem to be having the most difficulty containing the new wave. There is was a big jump in cases in the UK yesterday. Global deaths reported now exceed 1,134,000 (+7,000 per day).
The largest number of reported cases globally are still in the US, which rose +77,000 in yesterday's update to 8,608,000. They are clearly now in a third wave. The number of active cases is at 2,766,000 so many more new cases than recoveries. Their death total is over 228,000 and still rising at +1000 per day.
In Australia, there have now been 27,466 COVID-19 cases reported, and that is +22 more cases than we reported yesterday and new cases spread across the country. Deaths are unchanged at 905.
The UST 10yr yield is firmer again this morning by another +5 bps at just on 0.84%. Their 2-10 rate curve is noticeable steeper at +70 bps, their 1-5 curve is also steeper at +25 bps, along with their 3m-10 year curve, now up at +77 bps. The Australian Govt 10 year yield will start today with another +3 bps rise at 0.83%. The China Govt 10 year yield is down -3 bps at 3.19%. And the New Zealand Govt 10 year yield is down -1 bp at 0.58%.
The price of gold has fallen back from this time yesterday, down -US$22 and now at US$1902/oz.
Oil prices are a little firmer today, now at just on US$40.50/bbl in the US, while the international price is now just under US$42.50/bbl.
The Kiwi dollar starts today unchanged at just over 66.7 USc. Against the Australian dollar we are nearly +½c firmer at 93.9 AUc. Against the euro we have risen to 56.5 euro cents. And that means our TWI-5 is up at 69.9.
The bitcoin price is another +1.6% higher today than this time yesterday, now at US$13,052 in what is being described as a FOMO rally. 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 ».