No US election result yet; jobs gains peter out; US trade deficit worse; air cargo volumes rise modestly; China services PMI expands; Aussie retail strong; UST 10y at 0.78%; oil up and gold down; NZ$1 = 66.9 USc; TWI-5 = 70.1

No US election result yet; jobs gains peter out; US trade deficit worse; air cargo volumes rise modestly; China services PMI expands; Aussie retail strong; UST 10y at 0.78%; oil up and gold down; NZ$1 = 66.9 USc; TWI-5 = 70.1

Here's our summary of key economic events overnight that affect New Zealand, with news that while all eyes are focused on the US election, their pandemic is eating away at them more aggressively now.

But first, despite aggressive claims, there is still no election result in the US even though the incumbent seems to be in the better position. And again, this is despite the challenger winning more votes and by an increased margin. 98 electoral college 'votes' are yet to be decided.

Markets have reacted to the non-result in a schizophrenic way. Equity markets are up, but bond markets are signaling longer term fears.

Meanwhile, there is a US non-farm payrolls report out this weekend and a +600,000 jobs recovery is expected for October, which will still leave them with more than -10 mln jobs lost since February. Today we got the ADP precursor report and it anticipated a +650,000 gain after a +753,000 gain in September. But it disappointed by recording only +365,000 more jobs in the rebound from the huge losses earlier in the year. It is a disappointing signal.

One election consequence is that there is now much less chance those who have become jobless will find any more public financial support. Inequality and poverty is expected to rise sharply.

Although we have reported the US merchandise trade deficit for September earlier, today the full result including services is out, and for the year to September and including their services surplus, they have an overall deficit of -US$615 bln. While the goods deficit is worse, the American services surplus is shrinking faster, down to +$16.8 bln in September and down from +$24.1 in that month in 2019. Services exports have fallen much faster than services imports. American competitiveness is worsening across the board as they turn insular.

The widely-watched ISM services PMI slipped in October from its moderate expansion in September. The internationally benchmarked Markit one recorded a similar moderate expansion.

International air cargo volumes improved in September from August, but are still -10% lower than the same month in 2019. In the Asia/Pacific region it is a steeper -14% year-on-year decline. But there is no material improvement being recorded in passenger travel. Most airlines are in a critical fight for survival and the North American and European virus resurgence just makes things worse.

China's private survey of their services companies is reporting a stronger expanding sector, and much above the levels that they have had for the past ten years.

In Australia, they reported some good retail sales both for September, and the year ended September. And this was despite some tough results out of Victoria (-10%) which was in lockdown for much of the month. Overall, retail sales were up +6.6% in the month compared to the same month in 2019, bolstered by impressive gains in Queensland (+14%), Western Australia (+16%) and NSW (+10%).

After yesterday's RBA rate cut, two banks there, CBA and Westpac, cut fixed mortgage rates to below 2% (although hefty fees still apply and raise the effective rate above equivalent NZ fixed rates).

The latest global compilation of COVID-19 data is here. The global tally is 47,656,000 and a +325,000 rise overnight. It is still grim in Russia and Western Europe with serious stress on their hospital systems (and especially in Belgium). Global deaths reported now exceed 1,218,000.

The largest number of reported cases globally are still in the US, which rose a very worrying +125,000 since yesterday to 9,704,000 as the momentum in their surge rises and the US returns as the epicenter of the virus. The pandemic is now particularly sever in Midwest states. The number of active cases is higher at 3,227,000 so many more new cases more than recoveries. Their death total now exceeds 239,000 and up by almost +2000 in one day.

In Australia, they are not getting any resurgence. There have now been 27,622 COVID-19 cases reported, and that is just +12 more cases than we reported yesterday, mostly in NSW. Reported deaths are unchanged at 907.

The US bond markets are flashing fear signals. The UST 10yr yield has crashed -11 bps today to just 0.78% and that is a sudden reversal of its steady rise since mid-July. Their 2-10 rate curve has flattened sharply back to +63 bps in an unusually big move, their 1-5 curve is also much flatter at under +20 bps, while with their 3m-10 year curve is significantly flatter at +69 bps. The Australian Govt 10 year yield will start today down -7 bps at 0.77%. The China Govt 10 year yield is little-changed at 3.20%. But the New Zealand Govt 10 year yield is up +4 bps at 0.58% and ignoring the US bond market's risk move.

The price of gold has fallen overnight, down -US$13 at US$1894/oz.

Oil prices have firmed again and by about +US$1.50 and are now at just under US$39/bbl in the US, while the international price is now just on US$41/bbl.

And the Kiwi dollar is slightly softer this morning from this time yesterday at 66.9 USc but has held on to most of yesterday's rise. Against the Australian dollar we are a little softer too at 93.2 AUc. Against the euro we little-changed at 57.1 euro cents. That means our TWI-5 has dipped to 70.1. It is well with the narrow range it has been since June.

The bitcoin price starts today at US$14,002 and+3.6% higher than where we left it yesterday. It was last at this level almost three years ago. 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 ».

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Worth reading every word.

"Yet this is all invisible to most people as the media (and economics departments) still conflate price with cost and cost with value".

I particularly liked this bit: Humans are good at heart but we are biological organisms following cultural goals that have expiry dates. We have arrived at a ‘species level’ juncture and need to use systems science, reason, discourse, and leadership to navigate a glide path to intact futures.

Republicans will control the Senate, democrats win will find themselves hamstrung.

A divided, hyper-partisan, ineffectual America is good for no one. Not for Americans themselves and not for the world.

Exactly. All I see is a nation split down the middle in desperate need of strong leadership during a pandemic but with no clear victory for anyone to crow over (let alone demonstrate a strong mandate to move forward on).

Four years of relentless and baseless allegations against Trump and still a split vote speaks volumes.

Baseless? Funny guy. Trump is an ecocidal maniac. He doesn't try to hide that fact. He promotes it!

Trump will drag it through the courts because he knows the US political system is corrupt, just like the main stream media is which constantly spin their own narrative. You have to ask if banks can transfer millions in nano seconds with block chain tech why can’t voting be done the same way. The whole system is rigged and rotten to the core.

I don't think you under stand voting in a *democracy*.

block chain is a *public* ledger

In a democracy voting is done by *secret* ballot.

Anyone who thinks digital voting is easy should do some research

I work in IT, i can turn my home heating up and down from my phone anywhere on the planet. Technology is great. Paper based voting systems are the best.

Correct. There are two things to consider:
1) Combining anonymity with traceability is nowhere near trivial
2) The stakes are too damn high
Anyone who thinks this is easy should just look up how many 0-day vulnerabilities have been found in any version of Windows over the years. I'm not even sure if it's possible to design a digital voting system with our current technology that can't be exploited in some way.

Point taken TP - there’s no denying the mail in system is full of holes, from the mail system itself to people forgetting to put stamps on the envelopes. It needs an overhaul.

It's great for Russia and China.

It is certinally a good time for them to turn up the economical heat on the US while this drags through the courts for months.

That's like Jacinda becoming Prime Minister but National holding the balance of power.

It was deliberately designed that way. The founding fathers knew that it is best not to have politicians managing anything. Part of the illusion. I think they were also aware that rot would creep in eventually.

What happens when Mitch McConnell carks it, which, by the look of him, won't be too far away


The sad outcome of last night’s vote - no matter the final vote - is the true values of too many Americans has been exposed and it is not what they claim to uphold.



Kamala Harris was of course the most right wing possible Vice-Presidential pick. Her advance into power, despite being entirely rejected in the Democratic primaries, is in itself a huge condemnation of the system. I believe I am right in saying that Harris’s Primary campaign was so disastrous she managed to obtain zero delegates at all to the Democratic National Convention. Zero, None. Absolute bottom of the pile. Rejected by Democratic voters as the candidate in toto. Attempting to confirm this zero delegate fact, I just looked up the Wikipedia page on her primary campaign, which turns out to be the most entirely false, hagiographic and manicured Wikipedia page I have ever seen, on any subject, which is saying a lot. Apparently her Presidential Primary bid was in fact a tour de force of brilliant debating and political strategy, recounted in enormous detail, not an abject failure resulting in no delegates. The extraordinarily dishonest Wikipedia page is not perhaps in itself hugely important, but it is emblematic of the sinister manipulation behind the scenes of Kamala Harris’s rise to power.Link

The military/industrial/political/financial/institutional/academic/think tank/media complex does seem to be rather threatened by Trump, does it not? Can't have a rude private sector bloke lording it over them as knows best, now can we?

Have all presidents since this speech, except to some extent maybe Kennedy and Trump, just been controlled by their authoritarian mandarins?

Eisenhower's final speech seems relevant today:

If Biden becomes President he'll get that war machine up and running again.


since 1950 only Jimmy Carter and Trump haven't started a war

Possibly because Trump's a businessman from the private sector as oppose to a career politician like Hillary Clinton who they say never met a war she didn't like.

..does doing your best to start a civil war count?

War on truth and climate. Therefore basically human existence?

Audaxes... but Kamala is a black woman and we have descended into a world of identity politics.

I’ve wondered why no one has been mentioning Belgium? They have twice the deaths per capita of Sweden. If they are having a second wave then the herd immunity theories don’t compute.
What are their policies on Covid? How have they got it so wrong?


Belgium just counts differently. A lot of countries are trying to minimise the count for Covid deaths but Belgium includes probables.

As David states every day numbers are being under reported in many places. That doesn't suit the beliefs of many in these comments who want to minimise the risks of the virus and rant about mythical herd immunity. And they refuse to look at the data when it doesnt suit them even though herd immunity remains MIA.

Surety anyone who dies with Covid like symptoms would have been tested? Why are there probables? I doubt Sweden is undercounting by 50%

No Sweden won't be notably undercounting. There are many factors though. Demographics, test availability, culture, population density etc.

People are desperate to make rash assumptions and infer something about the stats but realistically we wont be able to do that for a few years (in terms of assessing strategy and death rates at least).
GN said this months ago. Its too early to make assertions about herd immunity. It just smacks of emotional thinking because the data isn't there yet.

Let's look at Americas death rate as an example. Their death rate looks pretty bad on a superficial analysis but what if the determinant of their death rate is their huge obesity problem or something to do with access to healthcare?

We still cant agree what causes heart disease. Epidemiology is not the hardest of sciences. We need to be patient and not jump on narratives.

> We need to be patient

In one sense you are right. The problem is that there is a great deal of urgency, outside of NZ at least.

I think Diogenes is saying we need to be patient about analysing the epidemiological data to infer something about increased death rates.

People (especially certain types of people) have been extremely quickly to rush to dangerous assumptions about herd immunity, death rates and all kind of things. Which potentially leads to extremely reckless behaviour with a novel virus. Lots of people in these comments claimed that Sweden had herd immunity, asymptomatic infections, that death rates were only related to nursing homes etc. The data simply wasn't there yet to jump to such conclusions. These people have a political position and are being swayed by their political feelings and tribal allegiances, rather than the science.

There is clearly no herd immunity at this stage or else there wouldn't be a second wave, so at least we know that at this stage.

We also understand how to treat people better now and have increased treatment capacity, which predictably, came with that was the other reason to be conservative earlier on in a pandemic. I think it's a shame that people can't just be sensible. Socially distance, wear masks, take precautions etc. But sadly, much of the world (especially America) went for extreme politicisation and drama instead.

Certain types of people? I wonder if you include me in that? My position has always been manage Covid within the parameters of civil rights, if you find the need to manage it that is. I think we have a case in medicine of Maslows Hammer, " if the only tool you have is a hammer, to treat everything as if it were a nail." Like is said the other day, it seems at this stage that the worst cause of death with Covid is management of it by putting people into rest homes. I'd say extreme arrogance at play to think it can be "managed", however the psychology is more complex than that. The technocrat honestly believes they are doing a good job.

I totally agree it is too early to tell much meaningful at all, it has become politicised. The difference in our positions is I say when unsure it is sometimes best to do nothing. There is less risk of causing harm that way. Too many hammers at play IMO.

How about this grossly deficient, or corrupt, fool giving advice to the UK government, and upon which policy decisions are being made? I'd say a case of telling them what they want to hear.

As for herd immunity, well I haven't commented on that. However I have followed the path of the talk of immunity and it has changed over the course of the virus. What it appears to me is that immunity still isn't understood very well at all by science.

I heard the other day that there are 2500 studies going on around the world into drugs for Covid. Follow the money..... all unearned income too.

If anyone thinks that civil rights principles can be messed with, they don't understand the principles.

GN, "sadly, much of the world (especially America) went for extreme politicisation and drama instead."

Have you considered that the "drama" you speak of could also be about making Covid sound worse than it is, such as the headline of this article "Virus eats America as it counts votes" ?

That way they can claim they haven't herd.....

"Virus eats America as it counts votes"

1 in 1'000 have died overnight, no, sorry 1 in 10'000 died overnight, hold on that's actually 1 in 100'000 who died overnight, bummer still wrong much less than 1 in 100'000 died overnight, musts be the sensationalistic headline that got me confused


Your confusion predated the headline.

But they are on course to have 1 in1,000 dead. They are 3/4 of the way there.

Anyone would think the little covid problem finished yesterday?

And the winner of the election is.... bitcoin

In local news.
Welcome to the socialist State.
- Bernard Hickey, who knew?
And the bit where GR is included to the twitter conversation & and then BH forgets who llocked everything down and made working illegal... priceless.
A question for
: Will the Government award more massive roading contracts to Fulton Hogan after it took $33.3m in wage subsidies and then paid out $83.8m in dividends to its Rich List family shareholders? NZH-$$$

Look at twitter comments...
Then doubling down.

Companies are effectively beneficiaries of a social contract: they benefit from the shared resources of a stable prosperous society and contribute their share to build that prosperity.

This doesn’t pass the sniff test. Whoever is leading Fulton Hogan needs to ensure those subsidies are repaid pronto.

# welcome to the Socialist State.
# change the rules afterwards, why don't you.
# Australia not stopped work

It was fortold that the future economy will be government spending and the select few beneficiaries from that spending, the freedom and conditions for independent SME being stripped in the meantime. Yes, it's socialism. And the people will love it for they are afraid