US election results clearer but no 'win' yet; US payrolls stay very weak; Canada payrolls ditto; RCEP summit near; China goes hard at Australia; UST 10y at 0.82%; oil down and gold up; NZ$1 = 67.8 USc; TWI-5 = 70.5

Here's our summary of key economic events overnight that affect New Zealand, with news China is using the American election distraction to ramp up its pressure on Australia.

But first, there is still no resolution to the tight US Presidential election. Biden is gaining in Pennsylvania, Georgia and Nevada. Trump may be gaining somewhat in Arizona but not enough to win there, and holding in North Carolina. If it ends that way, Biden wins and wins the Electoral College easily, 306 to 229 and by a larger margin than Trump won in 2016. This time however it will be with a +4 mln popular vote margin. (Recall Trump lost the popular vote by -2 mln in 2016.) Trump will undoubtedly attempt to get his stacked Supreme Court to invalidate as many votes as he can, so things could drag on for weeks yet.

In the US, October non-farm payrolls rose by +638,000 and marginally more than expected. But as we noted yesterday that still leaves the net loss since February at -10 mln jobs. It is an October result that was inhibited by the end of a large number of Census-counting jobs (-147,000), ones that weren't permanent in the first place. Of the growth they did get, the weakest was in manufacturing. The current unemployment rate is 6.9% and the number of long-term unemployed (those jobless for 27 weeks or more) increased by +1.2 mln to 3.6 mln, accounting for about a third of the total unemployed. There are increasing numbers of people out of the workforce - the employment-to-population ratio dropped to 57.7%, down from 61.2% a year ago. The New Zealand equivalent is currently 66.3%. If the US had the New Zealand ratio, a massive +22.6 mln more people would be employed there.

Canada also released jobs data for October overnight and they slipped backwards marginally with lower than expected jobs growth and a slightly higher unemployment rate of 8.9%. Canada's employment-to-population ratio is 59.4%.

China is calling for a virtual summit to get the RCEP free trade agreement agreed before the end of the year. This is a big deal, one that will include Japan and South Korea along with New Zealand and Australia - but it won't include India anymore.

And China's heavy equipment and construction machinery manufacturers are posting boom-time results as the country's infrastructure splurge gets into full gear. In fact, Beijing may have overdone it and there is increasing talk of winding back stimulus programs that may not now be necessary

China's wolf-warrior diplomacy is ramping up against Australia. An editorial in a CCP newspaper says "Australia will pay tremendously for its misjudgment" by staying aligned to the US, and daring to criticise China for its security adventures and human rights abuses. Wheat farmers seem to be the next to suffer trade exclusions - and being part of the RCEP is unlikely to deter China when it is this revenge mood.

Wall Street is flat today in mid-day trade, and the S&P500 will end the week with a stellar +7.3% gain and one built as the US election results became clearer, or at least clear enough for traders to bet on the outcome. Overnight, European markets slipped by about -0.5% with Frankfurt and Paris both booking an +8% recovery, London locking in a +6% bounce back from the prior week's steep decline. Shanghai ended it's week with a +2.7% rise and shaking off the Ant IPO disaster. Hong Kong was up +6.7% for the week, and Tokyo gained +5.9% on the same basis. The Tokyo market is near a 30 year high now. The ASX200 was up +4.4% for the week and the NZX50 Capital Index gained +2.1% (although it didn't fall as much the prior week).

The latest global compilation of COVID-19 data is here. The global tally is 48,947,000 and another sharp +667,000 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 1,237,000 and up +9,000 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 +128,000 since yesterday to 9,945,000 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 3,361,000 so many more new cases more than recoveries. Their death total now exceeds 241,000 and continuing to rise by more than +1000 a day.

In Australia, they are not getting any resurgence. There have now been 27,645 COVID-19 cases reported, and that is just +12 more cases than we reported yesterday and mainly in NSW. Reported deaths are unchanged at 907.

The UST 10yr yield is up +3 bps today at 0.82%. Their 2-10 rate curve is steeper at +67 bps, their 1-5 curve is also steeper today at +24 bps, while with their 3m-10 year curve is is marginally steeper at +73 bps. The Australian Govt 10 year yield will start today up +3 bps at 0.80%. The China Govt 10 year yield is up +2 bps at 3.22% but still in its recent range. The New Zealand Govt 10 year yield is up +5 bps at 0.57%.

The price of gold has firmed again today and up by another +US$8 to US$1954/oz. For the week, that is a +3.8% gain, and since the start of 2020 the yellow metal has gained almost +30%. Silver is up proportionately more

Oil prices have fallen about -US$1.50/bbl today and are now at just over US$37/bbl in the US, while the international price is now just under US$40/bbl.

And the Kiwi dollar is firmer this morning from this time yesterday at 67.8 USc and that is a +1½c rise in a week and all down to a declining greenback. Against the Australian dollar we are also a little firmer at 93.3 AUc. Against the euro we little-changed at 57.1 euro cents. That means our TWI-5 has risen to 70.5 and still near its 2020 high.

The bitcoin price starts today at US$15,513 and another +2% higher this time yesterday but more importantly cementing in the prior days huge rise. It has risen +14% in a week and has more than doubled since the beginning of the year. The record high in US$ 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 ».