Here's our summary of key economic events overnight that affect New Zealand, with news risk is 'on' in a big way today.
First, global financial markets are delivering a strong Biden bounce. Equities are up sharply as are benchmark bond yields. Commodity prices are generally higher, some have jumped a lot. But precious metals have sunk in very big moves.
The Chinese yuan has hit its strongest position in more than two years, as investors bet a Democratic president and a divided Congress could lead to reduced US-China tensions and a weaker dollar.
Helping the adjustment significantly is also news that the Pfizer/BioNTech virus vaccine has delivered very promising results. USFDA approval is now expected for the vaccine in two weeks.
American consumer inflation expectations slipped back from +3.0% in September to +2.8% in October. Most other household financial expectation metrics declined as well. Of course, these results are from a survey taken pre-election.
In China, new car sales rose above the 2 mln/month mark in October and cementing its status as the world's largest car market - and by a significant margin (the US sold 1.3 mln cars in October). A feature of the Chinese result is the sharp growth in electric vehicles, doubling in a year.
And China has brought in new tougher regulations for disinfecting frozen and cold-chain food imports as part of its coronavirus response.
And following China, Taiwan has turned in another very impressive trade result, recording a +US$7.5 bln surplus in October and far above the +US$5 bln expected. Exports rose +11%, imports fell -1%.
The EU said it will impose tariffs on $4 bln of American imports, including Boeing aircraft, as part of a long-running trade dispute initiated by Washington.
In the UK, they are moving to remove special tax breaks for private equity firms. It is a move that could also be mirrored in the US.
Wall Street has reached all-time highs today with the S&P500 up +3.3% in early afternoon trade. Overnight, European markets rose even more than that with Frankfurt up +4.9%, Paris up a massive +7.6% in its Monday session, and London up +4.7%. Yesterday's pre-cursor in Shanghai was modest by comparison, up a still-strong +1.9%. Hong Kong gained +1.2% and the very large Tokyo exchange rose +2.1%. Locally the ASX200 was up +1.9% and the NZX50 Capital Index was up +1.8%.
The latest global compilation of COVID-19 data is here. The global tally is 50,591,000 and up a sharp +539,000 rise in the past day. It is particularly grim in France, Russia, the UK and central and southern Italy with very serious stress on their hospital systems. Global deaths reported now exceed 1,258,000 and up +8,000 in just one day.
The largest number of reported cases globally are still in the US, which rose +105,000 since this time yesterday to 10,302,000. The US is the global epicenter of the virus. The pandemic is now particularly sever in Midwest states. The number of active cases is surging at 3,574,000 so many more new cases more than recoveries. Their death total now exceeds 244,000 and continuing to rise by more than +1000 a day.
In Australia, they are not getting any resurgence. There have now been 27,668 COVID-19 cases reported, and that is just +10 more cases than we reported yesterday and most in NSW. Reported deaths remain unchanged at 907.
The UST 10yr yield will start today with a very big move, up +14 bps at 0.96%. As a consequence, their rate curves have steepened sharply. Their 2-10 rate curve is up +10 bps at +77 bps, their 1-5 curve is up +8 bps at +32 bps, while with their 3m-10 year curve is up +13 bps at +86 bps. The Australian Govt 10 year yield will start today up +11 bps at 0.90%. The China Govt 10 year yield is also higher at 3.26% and a +4 bps rise. But the New Zealand Govt 10 year yield is only +3 bps higher, now at 0.60%.
The price of gold has fallen a massive -US$92/oz from this time yesterday, down to US$1858/oz. That is a -4.7% drop. And if you think that is unusual, the drop for silver is almost twice that level.
Oil prices have jumped higher today by a notable +US$3/bbl and are now at just on US$40.50/bbl in the US, while the international price is now just on US$42.50/bbl.
And the Kiwi dollar is much firmer this morning at 68.1 USc and adding to last week's sharp rise. That takes it to its highest since March 2019. The market's fear of tomorrow's RBNZ policy easing moves isn't strong. Against the Australian dollar we are also much firmer at 93.6 AUc. Against the euro we up more than +½c at 57.6 euro cents. That means our TWI-5 will start today at 71.1 and near its high for the year.
The bitcoin price starts today -2% lower at at US$15,093. 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 ».