Here's our summary of key economic events overnight that affect New Zealand, with news markets are speculating on a change of administration in the US.
The US election result is still uncertain this morning, and the US dollar is falling at the same time speculative asset prices are sharply higher. Gold and bitcoin have made substantial gains overnight. Equity prices are racing higher too. It may all be about an upcoming gridlock and stalemate in Congress.
Firstly, the US Federal Reserve board is meeting and their decisions will be announced at 8am NZ time. We will update this item then but no major changes are expected today. Update: Their Statement is here.
The number of new jobless claims for last week were +751,000 and higher than expected. The prior week tally was also revised higher. This surge of new claimants is matching the numbers who are dropping off the rolls as their benefits expire.
Tomorrow we get the October US non-farm payrolls report and these are expected to have grown a relatively small +600,000 as the bounceback effect tails off. That would still leave a net loss since February of more than -10 mln jobs during the pandemic.
Job cut totals in October were lower than in September but still historically high.
US vehicle sales came in at 16.2 mln annual rate in October and holding its recent levels. And General Motors is making a substantial financial comeback.
China is touting its import demand over the next ten years in a claim that it will replace the US as the center of global trade. It is using that as a magnet for diplomatic power. And the size of their economy is drawing huge inbound investment.
In fact, a new American analysis shows that within five year, the majority of China's households will be "middle class" in a very rapid transition out of developing country status. Not having a pandemic handicap is giving it clearer current advantages.
Singapore's retail sales fell a sharp -10.8% in September from a year ago, and the month-on-moth decline was sharp as well.
Australia has posted another large +AU$5.6 bln trade surplus in September for both goods and services, boosted by a +4% rise in exports and a -6% fall in imports. Their surplus with China however was +AU$4.8 bln for the month and AU$63 bln for the year to September. This annual surplus reached its peak of AU$73 bln in March and since then has declined as China started using trade as a defensive weapon to try and punish Australia for its security and human rights criticisms. Aussie wheat exporters are nervously watching the escalating trade dispute with China amid fears they could be Beijing's next target.
Despite all the election uncertainty, the S&P500 is rising strongly, up another +2% so far today and unfazed by the strong likelihood of a change in the Presidency. And unworried by the raging virus. Overnight European markets rose by a similar amount (except London). Yesterday Shanghai rose +1.3%, Hong Kong rose a stellar +3.3%, and Tokyo was up by +1.7%. The ASX200 closed up +1.3% while the NZX50 Capital Index lagged again with only a +0.4% rise.
The latest global compilation of COVID-19 data is here. The global tally is 48,280,000 and a very sharp +624,000 rise overnight. It is still grim in Russia and Western Europe with serious stress on their hospital systems (and especially in Belgium and now the UK and France). Global deaths reported now exceed 1,228,000 and up +10,000 in just one day in an accelerating shift.
The largest number of reported cases globally are still in the US, which rose a very worrying +113,000 since yesterday to 9,817,000 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 surging at 3,282,000 so many more new cases more than recoveries. Their death total now exceeds 240,000 and up by +1000 in one day.
In Australia, they are not getting any resurgence. There have now been 27,633 COVID-19 cases reported, and that is just +11 more cases than we reported yesterday. Reported deaths are unchanged at 907.
The UST 10yr yield is unchanged today at 0.79% and it made its big risk move yesterday (down) and has held since then. Their 2-10 rate curve is unchanged at +63 bps after yesterday's unusually big move, their 1-5 curve is marginally steeper today at under +22 bps, while with their 3m-10 year curve is is also marginally steeper at +71 bps. The Australian Govt 10 year yield will start today unchanged at 0.77%. The China Govt 10 year yield is also little-changed at 3.20%. But the New Zealand Govt 10 year yield is down -6 bps at 0.52% and late to the readjustment.
The price of gold has firmed sharply today and up by a significant +2.7% or +US$52 to US$1946/oz. It is an unusual move for the yellow metal. Silver is up proportionately more
Oil prices have slipped about -US$0.50/bbl and are now at just over US$38.50/bbl in the US, while the international price is now just over US$40.50/bbl.
And the Kiwi dollar is firmer this morning from this time yesterday at 67.6 USc and that is a +1½c rise in a week and all down to a declining greenback. Against the Australian dollar we are a little softer at 93 AUc. Against the euro we little-changed at 57.2 euro cents. That means our TWI-5 has risen to 70.5 and nearing its 2020 high.
The bitcoin price starts today at US$15,215 and a stunning +US$1200 higher than it was at this time yesterday. It will probably have changed further when you read this. That is an overnight gain of nearly +9%. Since this time last week it is up +12%. (It is behaving a bit like Auckland house prices.) It was last at this level almost three years ago. The record high in US$ was US$19,343 on December 16, 2017. 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 ».