Here's our summary of key economic events overnight that affect New Zealand, with news that in a world of rising uncertainty, markets are getting increasingly cautious.
In the US, durable goods orders rose more in September from August than anticipated by analysts. However, they showed zero growth on a year-on-year basis. But orders for non-defense capital goods did rise +2.6% on a year-on-year basis and that shows a recovering mood in the boardroom.
American retail sales marked time last week, barely expanding from the prior week, and showing only a tepid year-on-year expansion and half the rate we noted last week.
Also tame is the latest consumer sentiment survey which ticked lower in October because consumers are less optimistic about the short-term outlook than a month ago.
In their housing market, it is now clear that part of the current demand is because many who rent are now buying. The American home ownership rate has taken a sharp turn up in 2020 rising to levels last seen about 15 years ago and reversing the long interim decline.
In China, industrial profits rose more than +10% in September compared with the same month in 2019 amounting to a massive NZ$140 bln in the month alone. It contributed to a recovery that now sees all of 2020 gains exceeding the same nine months in 2019.
In South Korea, they released their Q3-2020 GDP result overnight showing a rise from Q2, but it is still -1.3% lower than the same quarter in 2019. It is a result dragged down by their international trade activity.
In the UK, as negative interest rates approach, one of their largest banks is warning that it could start changing for current accounts which are presently free.
In Australia, ANZ is the latest of the big four banks to warn markets of a major hit to profits. Only CBA has avoided that ignominy so far.
Wall Street is banking yesterday's losses and struggling to rise today, down marginally in afternoon trade. Overnight European markets fell further by about another -1% although Paris was down another -1.8%. Yesterday, Shanghai and Tokyo ended their trading day flat, although Hong Kong fell -0.5%. Both the ASX200 and the NZX50 Capital Index retreated a sharp -1.7%.
The latest global compilation of COVID-19 data is here. The global tally is 43,653,000 and up +437,000 since yesterday. In Russia, France, Spain, the UK and Italy authorities seem to have lost control and it is hard to know how they will regain it without new sweeping lockdowns. Global deaths reported now exceed 1,162,000 (+6,000).
The largest number of reported cases globally are still in the US, which rose +80,000 since yesterday to 8,979,000. The number of active cases is higher at 2,905,000 so many more new cases more than recoveries. And a new trend is the sharp rise in hospitalisations. Their death total now exceeds 231,000 and still rising at nearly +1000 per day.
In Australia, they are not getting any resurgence. There have now been 27,527 COVID-19 cases reported, and that is +14 more cases than we reported yesterday with zero in Victoria but most in NSW. Reported deaths are unchanged at 905.
The UST 10yr yield is down -1 bp today at just below 0.78%. Their 2-10 rate curve is flatter again overnight at +63 bps, their 1-5 curve is also flatter at +21 bps, along with their 3m-10 year curve, now flatter at +70 bps. The Australian Govt 10 year yield will start today down -2 bps at 0.79%. The China Govt 10 year yield is down -3 bps at 3.19%. And the New Zealand Govt 10 year yield is down a more chunky -6 bps to just on 0.55%.
The price of gold is up another +US$5 today to US$1909/oz.
Oil prices have recovered some today, up +US$1 to now at just on US$39.50/bbl in the US, while the international price is up a bit less to just over US$41/bbl.
The Kiwi dollar is firmer at 67.2 USc. Against the Australian dollar we have also firmed to 94.1 AUc. Against the euro we are up at 56.8 euro cents. And that means our TWI-5 is now at 70.3.
The bitcoin price starts today higher at US$13,607 with a strong +5.3% rise. In fact, in NZ currency it is now above NZ$20,000 for the first time in almost three years. 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 ».