China exports rise, trade surplus with the US expands; RCEP in focus; China sets up more strikes at Aussie trade; US payrolls rise modestly; UST 10y at 0.82%; oil and gold lower; NZ$1 = 67.7 USc; TWI-5 = 70.4

China exports rise, trade surplus with the US expands; RCEP in focus; China sets up more strikes at Aussie trade; US payrolls rise modestly; UST 10y at 0.82%; oil and gold lower; NZ$1 = 67.7 USc; TWI-5 = 70.4

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, China has turned in a very strong trade result in October. Exports came in much stronger (+11%) than the strong result anticipated (+9%). Imports came in much softer (+5%) than anticipated (+10%). That means their merchandise trade surplus swelled to +US$58 bln and far above the +US$37 bln surplus in September. The merchandise trade surplus with the US was a record high +US$31.4 bln. With New Zealand they ran a -US$160 mln deficit in the month, with Australia it was -US$4.9 bln deficit.

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.

And in a domestic update, it appears that their crackdown on the P2P sector has seen it shrink it from more than 6000 platforms, to only three now. The shrinkage has left NZ$170 bln in unpaid debt and claims. It has been a wild-west tale of fraud, abuse and corruption.

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.

Meanwhile the American election result sets up a three month period sure to be marked with the outgoing President settling scores with perceived enemies, and pardoning allies. It may also mean the US won't get any major stimulus as the outgoing Administration attempts to leave a scorched-earth problem for the new Administration to deal with.

Internationally, the 'hope' is that the US will return as an active and constructive participant in multilateral agreements. But nothing is sure at this point. A Biden presidency may calm things, but won't cure any imbalances automatically. Too much damage has already been done.

Domestically, US consumer credit growth bounced back in September after an unusual dip in August. That took the September level back to the same as in March 2020, so there isn't really any material rise.

And staying in the US, October non-farm payrolls rose by +638,000 and marginally more than expected. But as we have previously noted 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 a massive +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 +23 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%.

The latest global compilation of COVID-19 data is here. The global tally is 50,052,000 and a sharp +1,105,000 rise in the past two days. It is still very grim in Russia and Western Europe with serious stress on their hospital systems. Global deaths reported now exceed 1,253,000 and up +16,000 in just two days.

The largest number of reported cases globally are still in the US, which rose a very worrying +252,000 since Saturday to 10,197,000 as the momentum in their surge rises and the US returns as the epicenter of the virus. The US is recording daily record highs now. The pandemic is now particularly sever in Midwest states. The number of active cases is surging at 3,511,000 so many more new cases more than recoveries. Their death total now exceeds 243,000 and continuing to rise by more than +1000 a day.

In Australia, they are not getting any resurgence. There have now been 27,658 COVID-19 cases reported, and that is just +13 more cases than we reported on Saturday. Reported deaths remain unchanged at 907.

The UST 10yr yield will start the week unchanged at 0.82%. Their 2-10 rate curve is still at +67 bps, their 1-5 curve is also stable at +24 bps, while with their 3m-10 year curve is holding at +73 bps. The Australian Govt 10 year yield will start today down -1 bp at 0.79%. The China Govt 10 year yield is also unchanged at 3.22%. And the New Zealand Govt 10 year yield is still at 0.57%.

The price of gold has slipped slightly, down by -US$4 from Saturday morning to US$1950/oz but it does cement in a big gain over the past week.

Oil prices have stayed low over the weekend and are still at just on US$37.50/bbl in the US, while the international price is now just over US$39.50/bbl.

And the Kiwi dollar is little-changed this morning at 67.7 USc and embedding in last week's sharp rise. Against the Australian dollar we are also little-changed at 93.2 AUc. Against the euro we a tad softer at 57 euro cents. That means our TWI-5 will start the week at 70.4.

The bitcoin price starts today at US$15,408 and only -0.7% lower than where we left it. But it has been quite volatile in between. 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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62 Comments

"Too much damage has already been done...."
Well that's a really negative way of thinking about things!

Even if it's true?

Irregardless of persona:

https://consciousnessofsheep.co.uk/2020/11/06/the-narrative-problem-afte...

The underlying problem remains unresolved. And time is marching on.

Quite some quandary for incoming President Biden. Will his administration agree with Trump that the USA has become over dependent on China to the detriment of the USA economy and people, or will it just try and pick up where it left off, before Trump, four years ago. Betwixt the devil and the deep blue sea. Would not though be a good look for the USA to go cap in hand, that would court downfall. Biden cannot risk the USA diminishing in global perception and respect any further, as for instance occurred during Carter’s presidency.

And what success did Trump achieve? - all that bluff and bluster and the USA dependence on China goods has gotten greater. Oh right - he dealt to Tik Tok.

Yes, Trump was gonna fix the trade imbalance, but it’s only got worse - drastically. I doubt Biden can fix that, but it’s unlikely he can make it worse.

What did Trump achieve? You. You're talking about the state of affairs of the global economy. You're debating the accepted merits of globalisation in a way that was missing under many administrations before his.
It's not who Trump is, it what he is; and an agent of change is it.
(All second person plural, of course)

Problem is that is debatable. Decisive - yes , agent for positive change no. Don't for get it is not Trump who is buying all those trinkets and beads from China and until you are able to get people to change their buying habits any change in the balance of payments is likely to be to the downside.

Real change, by implication, is neve seen as 'positive'? Otherwise, the status quo wouldn't be in place. Change will be disruptive; uncomfortable and 'unpopular'. Ask anyone who's had to walk into a poorly performing division of any company, to 'turn it around' by making changes what responses they get! But, yes. It will take a behavioural change to alter the path we are on - here as well as The States.
Let's hope New Zealand has the courage to 'get out ahead' of the change that's coming.

Please define this mythical "change". The above missive is vague and lacking is any detail. You also haven't dealt with the second part of my reply - there has been no change in the habits of the buying population.

If his changes against China came without the other disruptions - withdrawal of the US as leader of the Free World, pulling away from allies while pumping up relationships with demagogues, sowing division in the USA rather than leading all the while attacking their own democracy, then I might have been inclined to agree. Globalisation brought massive benefits to the American companies who lead and used it, but didn't pay taxes on the gains made through globalisation.
In the end, Trump won't leave a legacy, and is likely to be remembered more for his divisiveness, petulance and letting hundreds of thousands of people die.

bw I agreed with a number of Trump's statements. Looking critically at globalization, China's growing influence on world affairs, bringing employment back to the heartland, I guess encapsulated in the Make America Great Again.
Where I disagree is in the difference between what Trump said and what he actually did.
Promised
Drain the swamp
Achieved
Reduced tax to the richest few, imbedded tax benefits to the biggest multi national American companies, reduced social support to the poorest, put his cronies in jobs like boss of US Post and on and on,

18
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Nz is far too dependent on Chiana already. In our own interest - nothing to do with the USA - we should tiptoe quietly away from the bully.
But ain't going to happen. NZ governments don't do that sort of leadership.

We hope......

Pre-Trump policy will continue tolerance of anti-Western values and feed China's economic growth.

Whilst Trump was looking to repatriate jobs and balance global economic power he was up against the profiteering interests of the corporations. Can't imagine Biden putting up the same fight. GloBAliSaTiOn!

Unlike some other world leaders.
“With regard to the U.S. election, we are going to wait until all the legal matters have been resolved,” Lopez Obrador said at a news conference.

“I can’t congratulate one candidate or the other. I want to wait until the electoral process is over.”"

Exactly, the electoral college vote decides. Each state has a different number of electors and each state has different rules about how those electors should/must vote. So the more authoritarian inclined states instruct their electors that they must all vote for the preferred candidate in that state. So all California's votes go to Bidden. Many states actually allow their electors to vote more freely, for example to split their vote to reflect the split in their state.

Just in May 2020, a Judge confessed that he took bribes to stuff the ballot for Democrats in Philadelphia which is one of the most corrupt cities in the USA. Electoral College electors in each state don’t vote until Dec. 14. The electors’ votes typically align with the popular vote in each state – nut they do not have to in most states. Indeed, not all states require the votes cast by electors to mirror the popular vote. Some states can still vote for Trump regardless of the corrupt elections.

https://www.armstrongeconomics.com/international-news/politics/no-biden-...

Will we see the same due process as in North Carolina? "Now voters will remain without congressional representation until a new election is held, following shocking revelations of a brazen scheme to break the law and swing the election using absentee ballots.

The hearing, originally scheduled to last one day, was well into its fourth when Harris abruptly called for a new election. “Through the testimony I’ve listened to over the past three days, I believe a new election should be called,” he said. “It has become clear to me that the public’s confidence in the Ninth District–seat general election has been undermined to an extent that a new election is warranted.”
https://www.theatlantic.com/politics/archive/2019/02/north-carolina-9th-...

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Fascinating, isn't it. The media have completely lost all objectivity it seems. I'm watching "Mr Jones" on Netflix at the moment. In the 1930s while the New York Times was promoting Stalin, a Welshman visits the Ukraine and sees what's really going on, ie millions being systematically starved to death. Time Magazine famously got it wrong too, with both Hitler and Stalin featuring as Man of the Year. Glad I don't live in the US. It is erksome that the NZ media just drink the Kool-Aid so readily, though.

Yup you and profile have been guzzling far to much of the stuff..sore tummies yet?

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The funny thing is I don't actually like Trump at all. Just find the anti-Trump jihad unpalatable. To me, a Trump is what you get when people have no one better and have been fighting meaningless wars for decades

No no, all we need is Biden to win and all the troubles of the world go away. We'll be back to normal.

Two sides screaming at each other and thinking the are right, but I've noted the smart people in my networks don't talk about which side is right, they question: "why are they screaming"?

Mexican President not compliant to the media agenda?
Trump could still win - wouldn’t that upset things
https://www.newsmax.com/morris/arizona-electoral-georgia/2020/11/08/id/9...

Since those rankings - Fox has moved a couple of columns to the left! Lol. Maybe Murdoch’s sons influence.

The consultancy of Dr Doom (Roubini) analyzes the RBNZ's Funding For Lending Programme. The paper can be requested here if you're interested.

https://content.rosa-roubini-associates.com/rbnz-preview-nov20/

meanwhile in deepest USA there is a meeting, some ex soldiers a few from various militias, Johnny runs the meeting, ex navy seal discharged with PTSD and lives on his own is Alabama, Billy is also ex forces, specialist sniper, discharged with depression lives with his elderly mother, Randy is ex bomb squad and joins various others with special skills not, least Bob from electronic warfare and Mike who served four tours of Iraq and two in Afghanistan specialising in covert operations.

The talk is of the election, the power of the media, even the Skipral case in the UK and they shake their heads in disbelief, they know how these things go they were part of the system. They move onto Benghazi and the Syrian chemical attacks, they know the system is rigged their homeland is being run by a corrupted media and financial elites in various corporations.

But what to do about it, first they need a name they settle on 'The Black hand' and people flock to them, believing they have no longer have control after the corruption of their once great country by the left, Antifa and BLM.

Forty years later the world is a smoldering mess, massive migration,poverty, hunger and crime, WW3 made WW1 a walk in the park no country escaped, hypersonic missiles reached everyone of us. Hold onto your hats

Out of the shadows Aj? De Pugh’s Minutemen of the 1960’s ride again?

meanwhile in deepest USA....

Are you planning on writing a book? The synopsis starts off well and looks interesting, but then the 'left conspiracy' rears its head. Now, I'm not suggesting that it doesn't exist, but if you're going to write a book, chances are that you will be echoing the same ideas about this conspiracy as many others.

Personally I think the 'left conspiracy' has been overblown to some degree. The problems in the Western world cannot be boiled down to centrist politics and the associated alliances. In fact, the 'tories in drag' label this is being bandied about to describe the NZ govt is actually quite amusing and not far from the mark.

The problems in the Western world cannot be boiled down to centrist politics and the associated alliances. In fact, the 'tories in drag' label this is being bandied about to describe the NZ govt is actually quite amusing and not far from the mark.

Too much Third Way Clinton and Blair politics for my taste.

America's always had a problem with violent, paranoid hillbillies. And every generation they have their defenders -- those who find protest more disturbing than war and kleptocracy. The cognitive dissonance is astonishing. A bunch of white guys with assault rifles storm a federal building and the cops don't raise a finger... Black church groups on a peaceful march get pepper spray and mass arrests. If Antifa didn't exist (and in a sense they don't -- anyone can turn up to a riot or protest and call themselves Antifa) then Fox would have to invent them. It's a boogieman, while the Timothy McVeighs of the world go about their business unmolested.

Timothy McVeigh was executed.
Proud Boys members and Kyle Rittenhouse are in jail for defending themselves from rioters.

The Illinois farmer never noticed the one ton bag of ammonia nitrate missing from his semi, after all there were 30 bags and randomly stacked, the fact he was bit short of fertiliser didn't affect him until he had nearly finished sowing, then he that nagging doubt that the drill may have been set a bit high he could have had the wrong cog on..

The old white pickup parked on the route the Antifa demonstrators were taking didn't look out of place amongst busy downtown and the police weren't exactly going out of their way to protect people who spat and threw rocks at them anyway.

11
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Former Heavyweight boxing champ Joe Frazier voted in this years US elections.

He died nine years ago.

That was his grand child from 4th wife...(I just made that up)..assume you did too?

Democrats been doing it forever

Smokin' Joe Frazier Among 22 Dead People Who Still Vote In Philly

https://www.bigtrial.net/2020/11/smokin-joe-frazier-among-22-dead-people...

What makes you think, fake impeachment, Russia, Ukraine bleach & fine people hoax, that suddenly some emotionally charged/triggered become saintly?

Then you'd really be making stuff up.

If true, once again The Simpsons got it right.

Remember how Sideshow Bob won the Springfield Mayoralty race?

"Snowball 2 not you too!"

Hopefully Biden takes Huawei off the blacklist so they can get back to making decent phones. They'd really started to push Samsung and Apple along - those two had gotten comfortable with pedestrian iterative change to match each other and then Huawei started making waves with the P30 handsets.

Prime information source for Chinese intelligence.

It always blows my mind that people say this when we have documented evidence of US intelligence agencies doing the same thing with things like Windows and mobile phones sold by Western companies too.

Five Eyes intelligence programs all over Apple iphones, according to Kim Ditcom.

according to the advertisements that are trying to sell me things I mentioned in my last sentence

It doesn't matter really. The truth is that even if Huawei had installed some form of tracking/eavesdropping/data mining process on the phone or any other (possibly US as Audaxes indicates KDC says) intelligence agency, the total amount of data captured would be so huge as to be meaningless and impossible to use. Instead a computer program data mining and looking for key words and phrases would be required, and even that would be delivering up so much trivial, non-relevant rubbish. Just think how many different meanings 'bomb' can take in English colloquialism and it become clear how big the problem is. No that list of important people that was identified that the Chinese had developed - that'll be how they do it to start with. Just monitor the phones and internet of a few who are considered movers and shakers.

When it comes down to it the human race is really creepy (and are blind to the hypocrisy).

Badminton Against covid.

“To the extent that these organisations contribute to the economy, they’ll have been eligible for the wage subsidy. Why is the sports sector getting extra special treatment?”

“New Zealanders who are losing their jobs or having their hours cut must wonder why they are less worthy of Government support than the Whitby Bowling Club ($10,012), Wanganui Croquet Club ($3,390.00), the Auckland Table Tennis Association ($19,694.78), Taiaotea Air Scout Group ($4,819.05), or Rolleston Softball Club ($17,362.00)."
http://business.scoop.co.nz/2020/11/07/badminton-against-covid-is-a-wast...

Short answer "Boomers" these clubs are run by and participate - they always get special treatment.

Yeah Nah , most of those boomer softball playing scouts are probably double dipping

This is a good watch in the US election process, a professor talking about what is constitutional and lawful. He likens it to a baseball game, November 3 was just the first innings. Most alarming aspect is that there isn't anything in law that says the incumbent has to concede, and then talks about the process if Trump doesn't. Despite being a democrat, he says it is a positive thing to be recounting when the election is close because voters want to have absolute confidence in the result.

He gives places to go for more information, for both parties. I don't agree with all he says, but what do I matter in this?

https://www.youtube.com/watch?feature=youtu.be&v=WZWRhLW7Y8w&app=desktop

Get underway with the more alarming stuff about prospects halfway through. Buckle up, it won't be solved anytime soon imo.

If it was down to one State you may have a argument. But the result is quite clear and unless some proof emerges of rampant voter fraud Trump need to put his big boy pants on and admit defeat. His cult like follower's need to do the same...but I doubt I will see that in my lifetime.

US Election: George W. Bush says 'fundamentally fair' election has a clear outcome, congratulates Joe Biden

I call BS on those employment to population ratios David(not you talking BS, the people who set the ratios!).

I would suggest (as you are) that those numbers are heavily manipulated. Check out the near identical demographics pyramids between NZ and US and you should see why:
https://www.indexmundi.com/graphs/population-pyramids/united-states-popu...
https://www.indexmundi.com/graphs/population-pyramids/new-zealand-popula...

They are basically identical. As we are quite similar (market economies, similar rights to work, similar methods of gathering data etc), I would suggest their methodology is off.

Aus: 62.1%
NZ: 66.3%
Canada: 61.3%
US: 57.7%
UK: 50.74% (but their demographics look quite a bit different)

Indeed if you check the graph here and switch to 25 years: https://tradingeconomics.com/united-states/civilian-employment-populatio...

... you will see it appears they have suddenly changed their methodology and are now just making stuff up compared to what it used to be. Looks like the agencies reporting this have been politicised to try and make things look better than they are. One guess as to which administration has done this...

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.

A Biden presidency will not benefit Australia's military adventurism in China's backyard. Same with India.
Equally Australia's climate policy will be subject to US scrutiny.
Australia to Join in Naval Drill With U.S., India and Japan
Spectre of Biden presidency haunts India
Australia warned it could be isolated over climate inaction after Joe Biden victory

I am not sure it is Australian's 'military adventurism' as opposed to a counter to China's. And all the nations in the Indo-Asian sphere will want some level of balance to hold China in check, and the US's presence will be crucial. It is china after all who is trying to expand it's borders. It will be disappointing if the US only participates for some form of quid pro quo. But then if they do and don't get what they want and pull back, then it'll cost them more down the track.

A great scheme!
Take out debt with a bank; run your business into the ground ( or let the market 'changes' do that for you) and buy back the debt, yourself, from the bank who's desperate to sell it at less than face value. Funnily enough, the original business then makes a miraculous recovery, just after you've bought your own debt for, say, 50% of what you borrowed!
Where have I seen that before? Oh, yes. Fortescue Metals in Australia, not that many years back.

Oh the symbolism

"Donald Trump's team host news conference outside garden centre, by a sex shop and a crematorium"

https://www.stuff.co.nz/world/americas/donald-trumps-america/123335794/u...

anyone read this? I am thinking it could be worth a day of reading

https://www.amazon.com/Pre-Suasion-Robert-Cialdini-Ph-D-audiobook/dp/B01...

Something I learnt 25 years ago, simple telephone answering technique that applies this mind prepartion theory. 1. Let it ring 2-4 times. Any shorter and peoples minds are not ready for you to answer, any longer an their mind starting thinking you won't answer. 2. Begin with an inoccuous greeting, which gives them time to process that their call has been answered. Good morning will do. 3. Prepare them for receiving your name, "good morning this is....". 4. Finish by passing your name and with what I guess you'd call a post name confirmation. "good morning, this is Andrew speaking".

Deliver with a nice easy cadence. So simple, it works. Not widely used though.

China to OZ action? clever long term gain political moves.... get the world depends on you, import large make the country depends on you.. once at the top? - crush the price, then bail/buy the supplier out... finally you own it! - The OZ metal resources is important, much more important than the NZ fresh produce, actually the most important from NZ is just a water to care about, the rest of the flock can be tricked into RE productivity.