Here's our summary of key economic events over this holiday weekend that affect New Zealand, with news the new pandemic wave hitting first world northern hemisphere counties is a very bad sign, and the economic knock-on effects could be awful.
But first, in China iron ore prices are staying high (+40% in 2020) but have stopped increasing. However, steel making coal prices are back rising fast again (+16% in 2020). And prices for corn are racing higher as the local grain harvest is late (+30% in 2020) even if officials claim it will be a full one.
Import demand is causing shipping rates to stay high.
More data out of Taiwan is impressing. Their September industrial production rose by more than +10% compared with the year-ago levels, and much faster than the good +4% growth in August. Export orders are driving this. By comparison, their nearly +3% rise in retail sales looks tame.
In India, onion and potato prices have suddenly risen, doubling in ten days. Rains damaged crops and now their government has imposed stock limits on traders. India's festive season demand is also driving prices up.
And staying in India, their central bank chief has tested positive for COVID-19.
In the US, their stimulus talks have fizzled. White House negotiators were instructed to pull back as an election tactic.
The US Fed balance sheet is expanding again, now up to a new all-time record of US$7.177 tln and eclipsing the June 2020 level. This balance sheet is +80% higher than a year ago.
At the end of this week, the first estimate of the US Q3-2020 GDP is due to be released. Analysts see a +32% rise from Q2, making back much of the -31% fall in Q2. (It's an intricacy of arithmetic, but to make back all of the Q2 fall, the Q3 rise would need to be up +46% - so they will still be running very much slower than the year-ago level.)
The first views of October PMI activity were released over the weekend. In the US, their services sector expanded faster despite a slowing of new order growth. But their factory sector's expansion rate was unchanged.
In the EU, they are getting a retreat with their services sector contracting although their factory sector is still expanding. Germany is still expanding but France is the laggard.
In Australia, their services sector's October expansion is strong enough to cover a factory sector whose expansion is slowing.
In Japan, things are not flash at all, with both services and their factory sector contracting in October, even if less so.
In the EU, they have decided that non-meat products can use the term 'meat' or 'burger' or 'sausage' despite existing bans protecting 'milk' and 'cheese', and despite aggressive actions protecting regional provenances. It is a typical European two-faced approach, claiming accuracy but rolling over for local lobbying.
Back in Australia, their housing market is surging, with this weekend's auction clearance rates exceeding 80% in Sydney and 73% in Melbourne.
The latest global compilation of COVID-19 data is here. The global tally is 42,830,000 and up +848,000 since Saturday. It is first-world countries that seem to be having the most difficulty containing the new wave. Sweden is back in a hard second wave. And it is raging in France, the UK, Spain and Italy again, and Belgium also has a very bad outbreak. Authorities in all these countries have lost control and it is hard to know how they will regain it. Italy and Spain have reintroduced sweeping new curbs. Global deaths reported now exceed 1,152,000 (+18,000 in two days).
The largest number of reported cases globally are still in the US, which rose +164,000 since Saturday to 8,853,000 and new record highs. he number of active cases is very sharply higher at 2,878,000 so a flood of new cases more than recoveries. Their death total is over 230,000 and still rising at +1000 per day. Their death rate per million is now 694/M and approaching the terrible Ecuador level.
In Australia, they are not getting any resurgence. There have now been 27,520 COVID-19 cases reported, and that is +38 more cases than we reported on Saturday and new cases are popping up in most states. Reported deaths are unchanged at 905.
The UST 10yr yield is unchanged at just on 0.84%.Their 2-10 rate curve is little-changed overnight at +69 bps, their 1-5 curve is also unchanged at +25 bps, along with their 3m-10 year curve, still at +76 bps. The Australian Govt 10 year yield will start today also little-changed at 0.84%. The China Govt 10 year yield is also still at 3.20%. But the New Zealand Govt 10 year yield is up +2 bps at 0.61%.
The price of gold has had a very slight dip, down -US$2 to US$1901/oz. And it is little-changed from the same level it was this time last week.
Oil prices are unchanged today, now at just under US$40/bbl in the US, while the international price is now just under US$42/bbl.
The Kiwi dollar is still at 66.9 USc and little-changed. Against the Australian dollar we are holding at 93.7 AUc. Against the euro we at 56.4 euro cents. And that means our TWI-5 is now at 70.
The bitcoin price starts today a little firmer at US$13,021 with a +1.8% 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 ».