Here's our summary of key economic events overnight that affect New Zealand, with news a global bond yield rebound seems to be working against regulators' desire for lower rates to boost economic activity.
But first in the US, mortgage rates have fallen to record low levels. Their benchmark 30 year is now below 3% for the first time ever (plus points). And that is despite benchmark bond rates rising sharply since the US election. Mortgage applications were soft last week.
In China, loan growth in October came in lower than expected and that was something of a surprise. Growth undershot by -¥110 bln (NZ$25 bln) but it still rose year-on-year by almost +13%.
China's Singles Day sales event is now over, probably breaking records.
To keep things pumped up, China’s top banking regulator has relaxed requirements for licensed consumer and car finance companies to boost consumer lending by cutting reserve requirements.
In Hong Kong, China is clamping down even harder on internal dissent. It is now very dangerous to question Beijing now, and their opposition MPs have all resigned in protest.
Japan machine tool orders made a good comeback in October to be now only -6% lower than the same month last year. In September the year-on-year decline was -15%.
The EU is extending its suspension of its budget rules so that larger deficit spending for longer can proceed. A top official there says a V recovery is an illusion.
In Australia, the latest consumer sentiment survey is very positive, pointing to a 'normal' end-of-year holiday shopping season.
China has pulled out of investing in a large Australian gas field development, a quarter stake in a AU$16 bln project. It is being seen as another rejection by China of Australian policies toward the Middle Kingdom.
Negotiations have concluded in the 15 country RCEP trade deal with ministers expected to sign it on Sunday.
Wall Street is rising again today. It may be a public holiday (Veterans Day) in the US, but the financial markets are still open. The S&P500 is up +0.8% in early afternoon trade after flatlining yesterday. Overnight, European markets rose again, mostly by about +0.5% although London rose +1.4%. Yesterday's Shanghai fell another -0.5%. Hong Kong fell -0.3% and the very large Tokyo exchange rose an impressive +1.8%. Locally the ASX200 ended up +1.7% and the NZX50 Capital Index was up +0.4%.
The latest global compilation of COVID-19 data is here. The global tally is 51,684,000 and a sharp surge of +771,000 rise in the past day. It is still grim in France, Russia, the UK, Spain and central and southern Italy with very serious stress on their hospital systems. But there is some suggestion of an easing in some other European countries. Global deaths reported now exceed 1,276,000 and up +13,000 in just one day.
The largest number of reported cases globally are still in the US, which rose +145,000 since this time yesterday to 10,584,000. The US remains the global epicenter of the virus and has gone leaderless and rogue. Hospital stress is severe in many places now, particularly in the Midwest. The number of active cases is surging at 3,735,000 so almost +100,000 more new cases more than recoveries in just one day. Their death total now exceeds 246,000 and continuing to rise by more than +1000 a day.
In Australia, they are not getting any resurgence. There have now been 27,686 COVID-19 cases reported, and that is just +8 more cases than we reported yesterday. Reported deaths remain unchanged at 907.
The UST 10yr yield will start today very similar to yesterday at 0.96% and holding the big recent gains. Their 2-10 rate curve which is marginally steeper at +78 bps, their 1-5 curve is also a little steeper at +33 bps, while with their 3m-10 year curve is unchanged at +87 bps. The Australian Govt 10 year yield is unchanged at 0.96%. The China Govt 10 year yield is also unchanged at 3.26%. But the New Zealand Govt 10 year yield is another sharp +15 bps higher, now at 0.88%.
The price of gold has fallen back today, down -US$20/oz from this time yesterday, and now US$1864/oz.
Oil prices have risen again today and are now at just over US$42/bbl in the US, while the international price is now just under US$44.50/bbl. These are rises of about +US$1.50/bbl. But OPEC has cut its expectations that world crude oil demand will rise anytime soon, seeing only declines now.
And the Kiwi dollar is a firmer yet again, up another +½c at 68.7 USc and its highest since March 2019. Against the Australian dollar we are also much firmer at 94.6 AUc with a rise of almost +1c. Against the euro we are up at 58.4 euro cents. That means our TWI-5 will start today at 71.8 and near its high for the year.
The bitcoin price is up +3.0% this morning at US$15,748. 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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