Here's our summary of key economic events overnight that affect New Zealand, with news of large drops in commodity prices, especially for gold and oil.
First, the expected rebound in economic activity was recorded in the American GDP data for Q3-2020 from the June quarter. But that still leaves their economy operating -2.9% lower than in Q3-2019. In current dollar terms, -1.8% lower, so by any measure it has yet to recoup all its pandemic losses.
New claims for unemployment benefits last week came in at 732,000 which was just under the expected level. The number of people on these benefits are now just under 7.8 mln and -700,000 less than the prior week. Some will have found work but most will have come to the end of their support, building on the social stresses they face.
In better news, Toyota says its global production grew almost +12% in September from a year earlier to 842,000 vehicles in the month, marking the first year-on-year increase in nine months and indicating a recovery from its pandemic sales slump has begun. Their sales in China jumped almost +50%. VW is also reported a sales surge in China.
However, at home Japanese consumer confidence stayed very low in October but it is rising, which is better than not.
The Bank of Japan didn't change any key settings at its overnight meeting, but is relatively upbeat in its assessment of the progress of the Japanese economy.
In Frankfurt, the ECB has signaled that it will act in December to support a fast-sagging EU economy that is struggling with a renewed pandemic wave. Theirs is a downbeat assessment and in a growing section of their economies it is getting 'desperate'.
And that is reflected in the EU sentiment surveys that show the improvement of these consumer and business measures has halted in October.
Wall Street has started today with a relatively good partial recovery of this week's steep losses, with the S&P500 up +1.8% in early afternoon trade. Tech earnings are helping today. Overnight European markets ended flat, embedding their losses. Yesterday Shanghai ended up a minor +0.1% while both Hong Kong and Tokyo shed -0.4% each. The ASX200 had a tough day down -1.6% and the NZX50 Capital Index fell 0.5% at their respective closes.
The latest global compilation of COVID-19 data is here. The global tally is 44,684,000 and up +525,000 since yesterday and a new record daily high. It is very grim in Russia and Western Europe with serious stress on their hospital systems. Global deaths reported now exceed 1,177,000 (+7,000). A sharp rise in deaths is now expected in a week or so now this third wave has taken hold.
The largest number of reported cases globally are still in the US, which rose +89,000 since yesterday to 9,146,000. They are 'rounding the turn' but not the one their President claims. The number of active cases is higher at 2,970,000 so many more new cases more than recoveries. And a new trend is the sharp rise in hospitalisations. Their death total now exceeds 233,000 and still rising at more than +1000 per day.
In Australia, they are not getting any resurgence. There have now been 27,569 COVID-19 cases reported, and that is +15 more cases than we reported yesterday split across most states. Reported deaths are unchanged at 907.
The UST 10yr yield is up +8 bps today at just on 0.84%. Their 2-10 rate curve has turned much steeper overnight to +67 bps, their 1-5 curve is also steeper at +24 bps, along with their 3m-10 year curve, now steeper at +74 bps. The Australian Govt 10 year yield will start today up +4 bps at 0.82%. The China Govt 10 year yield is up +1 bps at 3.20%. And the New Zealand Govt 10 year yield is also up +1 bps to 0.52%.
The price of gold is down again today, down another -US$12 to US$1868/oz. Global gold demand hit its lowest level in 11 years in the third quarter of this year and central banks became gold sellers for the first time since 2010.
Oil prices have also fallen sharply again today, down another -US$1 to now at just under US$36/bbl in the US, while the international price is down a bit more to US$37.50/bbl.
And the Kiwi dollar is softer by another -½c at 66.1 USc as the greenback rises on serious risk aversion in commodity markets. Against the Australian dollar we have remained firm however at 94.2 AUc. Against the euro we also holding at 56.7 euro cents. The anti-commodity currency mood is also reflected in a rising yen. And that means our TWI-5 is down to 69.7.
The bitcoin price starts today up +3.2% at US$13,559 and making back most of yesterday's dip. 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 ».