US jobless claims fall, -1.1 mln fall off support; US CPI falls; Canadians brace for higher mortgage rates; ASEAN plans travel corridor; UST 10y at 0.90%; oil stable and gold up; NZ$1 = 68.8 USc; TWI-5 = 71.8

US jobless claims fall, -1.1 mln fall off support; US CPI falls; Canadians brace for higher mortgage rates; ASEAN plans travel corridor; UST 10y at 0.90%; oil stable and gold up; NZ$1 = 68.8 USc; TWI-5 = 71.8

Here's our summary of key economic events overnight that affect New Zealand, with news markets are much more cautious today, winding back the post-election, post-vaccine enthusiasm.

In the US, new claims for jobless benefits fell marginally to 723,000 although the previous week's number was revised up. That makes the total number of people supported by these benefits at now 21.2 mln and that is down -374,000 in a week. This shows -1.1 mln people lost qualification in a week or found work. This time last year, the total number on jobless benefits was 1.4 mln.

There is almost no chance new support for those who have lost their jobs is arriving before the new President is sworn in. And after that, it will depend on the makeup of the Senate after the Georgia runoff election.

And American inflation is falling. Overall inflation is +1.2% pa, and core inflation (without food or energy) is at +1.6%. Both measures are lower in October than September. Food prices were up +3.9% in a year, petrol prices were down -18% in a year. Rents are up +2.0%, medical care is up +3.7%.

Meanwhile, prices for single family homes rose +12% in the September quarter, the fastest rise in seven years. A lot of this is being driven by higher prices on both the East and West Coast states.

In Canada, homeowners there are bracing for rising mortgage interest rates. As bond rates turn up, Canadians may be the first to feel the impact of a turn up in the rates they pay.

The ten member ASEAN trade group has started on building a travel corridor between each of them.

And iron ore prices are staying high. Coal prices are rising. However, shipping prices are starting to retreat again.

And Wall Street is slipping today. The S&P500 is down -1.1% in early afternoon trade. Overnight, European markets also fell, mostly by about -1.2%. Yesterday's Shanghai fell another -0.1%. Hong Kong fell -0.2% but the very large Tokyo exchange rose +0.7%. Locally the ASX200 ended down -0.5% and the NZX50 Capital Index ended unchanged.

The latest global compilation of COVID-19 data is here. The global tally is 52,331,000 and a surge of +467,000 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. And the death rate is rising. Global deaths reported now exceed 1,288,000 and up +12,000 in just one day.

The largest number of reported cases globally are still in the US, which rose +146,000 since this time yesterday to 10,730,000. The US remains the global epicenter of the virus. The number of active cases is surging at 3,828,000 and now rising at almost +100,000 per day of more new cases more than recoveries. Their death total now exceeds 248,000 and continuing to rise by more than +1000 a day. The US now has a death rate matching Bolivia, Mexico and the UK.

In Australia, they are not getting any resurgence. There have now been 27,698 COVID-19 cases reported, and that is just +12 more cases than we reported yesterday and spread around the country - except Victoria. Reported deaths remain unchanged at 907.

The UST 10yr yield will start today much lower than yesterday at 0.90% and a fall of -6 bps. Their 2-10 rate curve is flatter at +73 bps, their 1-5 curve is also flatter at +28 bps, and their 3m-10 year curve has flattened to +81 bps. The Australian Govt 10 year yield is also down -6 bps at 0.90%. The China Govt 10 year yield is up +2 bps at 3.28%. But the New Zealand Govt 10 year yield is down -2 bps, now at 0.86%.

The price of gold has risen today, up +US$16/oz from this time yesterday, and now US$1880/oz.

Oil prices are stable today and are still at just over US$42/bbl in the US, while the international price is now just under US$44.50/bbl.

And the Kiwi dollar has settled at its higher level, now at 68.8 USc and its highest since March 2019. Against the Australian dollar we are also unchanged at 94.6 AUc. Against the euro we are a little softer at 58.2 euro cents. That means our TWI-5 is still at 71.8 and its high for the year.

The bitcoin price is another up +2.5% this morning at US$16,138. 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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68 Comments

Rat poison @ 16k. Holding perfectly to the log chart.

Around 125% return this year. And as much as 300% had you bought in March (perhaps even 500% if you were a keen bitmex buyer at the exact bottom). And that tops another 90% return last year.

Just needs to come down so I can get some more

Neeed Mooore!! :(

If you're holding long term 2k fluctuations aren't worth waiting for. Buy and hodl.

As Snoop Dogg would say "Stack Sats Everyday!!"

Having been pro PM’s for some time, I’m now seriously looking into BC - when the likes of Paul Tudor Jones take a large position must say something. As more of us wake up to the debt based fiat Ponzi scheme PM’s & BC are the only alternative as a store of value to protect one’s wealth.

Until governments bite back. As I understand it, technically if you enter the US and own more than $10,000 of bitcoin you are bringing in more than $10,000 and it can be confiscated. Each government will fight back to maintain it's monopoly on currency. The UN will probably make it illegal to own bitcoin. There be dragons a stirring, methinks.

Don't forget they confiscated all privately owned gold in the US the last time the money system fell apart. Expect the same in Europe and probably the US, for the same reasons that China has made bitcoin illegal. You will obey your masters, or else.

I doubt this is true. Its not money, not currency. Nor are you importing it. Its no different to having 1 million dollars worth of euros in an offshore account when you pass through the border.

Bit of a yarn mate. If you think the $10,000 border rule will catch crypto, you need to read up more about crypto.

re: Gold confiscation. Not all gold was confiscated, but it was well below 50% of private ownership at the time. Gold confiscation did not apply to coins with a numismatic value, as was gold for manufacturing and jewelry. Furthermore, each person in the household was allowed up to five ounces of gold.

You need a bit more research into BTC Roger...how do you confiscate it..or shut it down (turn of the internet)?

Habeus corpus, old chap. They just hold you in custody until you hand it over.

https://www.armstrongeconomics.com/world-news/cryptocurrency/the-fate-of...

Hand what over? ...please be specific ---old chap

The bitcoins!

**sniggers**

Sorry Roger but the only rebuttal I can give is go and educate yourself.

Sigh. I don't think bitcoin is a bad investment, it should do very well as commodities rise and the purchasing value of the USD is devalued. I think it is insecure. Governments will confiscate it, and tax it, bitcoin speculators will be vilified and hounded. Hopefully not here in NZ, but across the world , they will turn popular opinion against you so they can confiscate it. The danger increases exponentially with it's value.

I commented on your post below, but please have a read:
https://chrisgimmer.com/bitcoin-reserve-asset/#:~:text=Portability%3A%20....
It is the most secure network in the world, literally it is all about defense. It has been open and available to attack since the day it was released on the internet 11 years ago. SO it is literally a $200b bug bounty. if you can find a fault you can control all the BTC.
Governments couldn't even confiscate gold successfully (they gave up on that after a few years), and that is a large, heavy shiny hunk of metal, how do you expect them to confiscate something the cant even see. How do they know if I have the seed to my BTC stored in my head that I can just restore when I have access to a PC or smart phone anywhere in the world?

Folks have been talking about governments banning btc, or confiscating it, but that's highly unlikely and here's why. If they propose that in the first place, then they understand that Bitcoin will become so incredibly valuable that it may threaten government itself.

Private gold ownership was banned in the US in 1933. But, people forget that the reason private gold ownership was banned is because the USD was redeemable for a fixed amount of gold. They needed to break the peg to expand credit (to stimulate).

In order to stimulate the economy today, the Fed and the US government have a currency that is NOT pegged to gold OR bitcoin. Meaning they can stimulate as much as they want!

They don’t need to ban Bitcoin ownership to prevent a run on the dollar (like 1933).

But even if you are still worried they will find a different reason to ban bitcoin, when the US made gold illegal in 1933, gold did not lose its value. It actually increased in value relative to the dollar, and thirty years later, the ban was lifted.

Additionally, Bitcoin is a decentralized global network.

Banning Bitcoin wouldn’t kill bitcoin.

You’d have to physically find every Bitcoiner and destroy their computer(s) to kill Bitcoin.

Besides, If governments have been unsuccessful at banning drugs, alcohol, and gold how are they going to be successful at banning something that doesn’t even PHYSICALLY EXIST?

Last, the legal precedent for Bitcoin certainly appears to be going in the exact opposite direction of a ban. Bitcoin senators (Cynthia Lummus) are being elected and states like Texas and Wyoming are passing legislation to protect it.

If you're not holding Bitcoin because you think it will get banned, you're in for a rough ride.

Great summary friend :)
Money is a winner takes all game. Value flows from soft money to hard money, and BTC is the hardest money that has ever existed.
MicroStrategy has just paved the way for corporations to start holding BTC in their corporate treasury with their $400m purchase, square has also just brought $50m worth. And the kicker, its limited in supply so if any other corporation wants to buy any, they have to find a seller. "Since Feb. 11, Bitcoin exchange reserves dropped from 2.96 million to 2.41 million. In dollar terms, a drop of 550,000 BTC is equivalent to $6.36 billion."

Around 125% return this year. And as much as 300% had you bought in March (perhaps even 500% if you were a keen bitmex buyer at the exact bottom). And that tops another 90% return last year.

Not the way to to be talking about the ol' rat poison. Us HODL'ers are not speculators or punters at the Sky City Casino. We just want to preserve value and the scarcity properties of BTC do that admirably. Granny Herald doesn't dedicate its content to technology or the transformation of what money is and should be (a store of value). If the masses decide to allocate some of their net worth to BTC, then so be it. And that's really the 'ka-ching' moment. We're far from that at the moment, but the rate of change is huge.

Ray Dalio announced that the govts may ban BTC if the price keeps rising. I'm not sure that could ever happen universally.

https://cointelegraph.com/news/ray-dalio-believes-nations-will-outlaw-bi...

If it is held offshore, then surely you owe the IRD tax on 5% of its value each year? They may also decide that what to you is investment, is trading from their point of view. Tall poppy syndrome rules.

I could have blown those numbers out of the water if I'd won the last lotto powerball.
(But I didn't)

Is this the beginning of the end of the Facebook ascendancy?
Since the US election, millions have migrated to alternative social media and media sites like Parler, Rumble and Newsmax
https://www.nytimes.com/2020/11/11/technology/parler-rumble-newsmax.html

15
up

I have totally lost interest in facebook and have deleted my account, probably will never sign on to any other similar app, they are too invasive and pervasive

Fox viewers moving to Newsmax. The James Murdoch influence too much for many?
https://edition.cnn.com/2020/11/12/media/fox-news-newsmax-reliable-sourc...
But there’s always new ‘hate speech’ legislation to shut these down.

Ezra Klein on the USA: The crisis isn’t too much polarization. It’s too little democracy.
https://www.vox.com/21561011/2020-election-joe-biden-donald-trump-electo...

That's the system or agreement that formed the US. It can only be legally changed with the required state agreement.
This would be somewhat similar to the Treaty of Waitangi and Maori seats but the US constitution was more explicit.

17
up

JA and likes are brainwashed by so-called experts and people with vested interest that one cannot allow market to fall as many people are linked to it so that result in them supporting the ponzi and government along with agencies go all out not realizing that they have been brainwashed for allowing ponzi to contine.

20% rise in a year - Will it help FHB who were already struggling thiugh interest rates are low?

JA says that Mr Orr is looking into issue but is he - if the issue is so serious why not bring measures to contain it ?

JA hiding behind Mr Orr ti solve and Mr Orr says that it is not his job to contain the housing ponzi ( infact ever rising housing price is good for them atleast to him personally). So whom to believe PM who says RBNZ is looking at issue or Mr Orr who says not my job ? Why this question has not been raised by experts and media.

JA should well know words are easy but doing what they say is a different kettle of fish. The immensity and longstanding of this problem can hardly have only just dawned on her and if you cannot offer anything more than stating the bleeding obvious, best not to say anything then. Reminds me of a Keith Quinn commentary in the old days, where it seemed he assumed his TV audience were all blind.

For all that, there are an enormous number of New Zealanders who need more than hugs from their prime minister. They voted for the parties of government because they wanted to see a promised “transformation” rather than business as usual.

It was supposed to be the government’s “Year of Delivery” – or so Ardern declared to the press at the beginning of 2019. It was a neat line, because 2018 had been the “year of the working group” in which little reform was carried out, on the promise that the experts would hand the government some major new policies to implement.

https://www.theguardian.com/world/2019/dec/31/new-zealands-year-of-style...

Is the PM more like Jimmy Carter or Joe Biden?
#race to the bottom

Henry - Joe hasn't even taken the wheel let (poor old orange face wont let go, just like the little boy he is..1 term loser).
Lets give him 100 days before we slag him off ah?

What if his first one hundred days involves bombing Iran?

frazzz you know we rely on you to completely miss the point.
Keep up the good work.

Keep safe in your other dimension Henry - we rely on you to send us news from there.

How many houses do Orr and politicians own? Is this disclosed anywhere?

12
up

Very interesting to see upward movements on interest rates in the UK and now Canada...

Yes, any upward movement in bonds will have big consequences if it’s sustained. But why now?

Swaps spiked sharply on the vaccine news. Is that what we're talking about here?

Mortgage interest rates in Canada are like 1.35 - 1.64% so that very well could be the bottom. The only way is up from there and then only by a small amount resulting in an increase of about $50 a month or thereabouts. No need to panic at this stage.

idle talk only
rates can never go up ... and certainly not for long
You cant unleverage leverage
we are all too far in the hock
The world economy is in deflation mode with lack of demand
the LAST thing it can handle is higher rates

I agree, can't see how rates can rise at all without imploding the system. Might not be such a bad thing, if it were to happen.

The rise is from the banks themselves though, right? Not the BoE. They also temporary removed stamp duty too, which would fuel a rise in prices.

Lucky no one is losing jobs over there.

Any slither of faith I had in Jacinda and the Labour govt has completely gone. She knows full well the govt can change the RBNZ mandate and could give them the ability to introduce DTI limits. She is a liar and a fraud.

Cant keep rising BUT is and does.

JA is just trying to hide behind excuses or justification BUT fact is that it does not fundamentall but because of support and promotion by current RBNZ and government.

She can act and act fast BUT no intent

The price of a house can't get any higher than the amount of money a household can pay back in 30 years, surely.

So, who the heck is doing all the buying? Cant be FHB's stressed households who have just had their deposit requirements increase by 10% in 4 weeks

When I saw my banker earlier this week he said FHBs are very active.
Many will be raiding their kiwisaver accounts and getting help from parents to try and get in to the market.

I would say no
Paying back is basically irrelevant
Its about servicing (and from a systems wide point of view - continued INFLATION)
Deflation of prices (in assets & in general) is the scary beast you can not unleash at any cost

Accidentally hit the report button as the page bounced around

I listened to the Jacinda interview..
I don't think she knows that much about house prices, and the causes of.. . Seems to have faith in her "experts".
At the point house price affordability, with its growing wealth inequality divide, becomes THE election issue... then she might take it seriously.
The conundrum is that she will look to her "experts " for advice...?? or.... maybe she'll bring in that Capital/wealth tax. ( A politicians go-to solution mostly seems to be tax and regulation. )

Like John Key... I think Labour realizes that GDP growth in NZ relies , mostly, on immigration and credit growth.

Probably best not to try & read her mind.

Maybe use a check of emperical evidence. Currently she is making the poorer poorer.
While making rich all the people that didn’t vote for her.

Any socialist would mark this as a fail.
- on what kpi is she succeeding?
Answer below, thanks.

Like John Key... I think Labour realizes that GDP growth in NZ relies , mostly, on immigration and credit growth.

NZ bank credit growth is primarily directed to non-GDP qualifying assets (residential property).

For Instance: Westpac New Zealand extended 62% of loans to housing to record a $3.727 billion increase from last year, while lending to all other categories combined fell.
Link - page 22 (27 of 145)

Audaxes.
New credit might enter the economy thru non _ gdp assets , but then it flows, wher
ever it will.. Just as a drug courses thru ones veins.
One mans spending ( new credit) becomes another mans income.

I am not spending at all at the moment, despite sitting on wads of unearned income. The reduction in interest rates has turned me into a miser, reluctant to liquidate other's endeavours, beyond necessities. Other than quantity, they say velocity is the spice of life when it come to money.

Unrealized capital gains is not money.
In regards to velocity of money, i prefer watching the levels of credit growth.
Once mkts lose confidence in holding money asset, then velocity of money might become meaningful... In a bad way.
Just my view on things..
Ps.. your lack of spending might suggest u are getting older.,.. like me ..
60ish

Unrealized capital gains is not money.
I'm talking realised and in the bank cash. All assets are all recorded at historical cost in my family trust.

Well... that cash is being lean't out to others thru ,hopefully, prudent Bank lending ... u are helping to "grow" the economy..!
Historical cost wont help us when the Wealth tax comes in..!!

Central Banks Short on Ammo Forced to Rely on Governments

Just eight months after they swung into action to avert a crippling depression and credit crunch, central banks are in the uncomfortable position of relying on governments to power fragile economic rebounds.

The decisions their counterparts make will affect not just the growth outlook for the next few quarters, but could shape central banks’ policy options, and even their credibility, for years to come.

Monetary authorities entered the Covid-19 crisis with the least conventional policy space -- namely, interest-rate cuts -- of any postwar downturn. After pulling down borrowing costs near or even below zero and deploying massive asset-purchase programs, they are now practically begging governments to step up.

Without aggressive fiscal stimulus now, the danger is that economies develop deep scars that hobble growth over the longer term. That could then leave central banks unable to reset and prepare for the next shock or recession. Monetary policy and fiscal policy are now interdependent.

Is it a bug or a feature?

Being show day with no show.
Here is some cool shed work
https://youtu.be/rodo_3QOr-U
Tractor pulling drag racing.

Oh dear, oh dear, reality bites back, coal prices up, oil prices up.

The worldwide USD denominated debt based asset bubble system had a major heart attack in 2008, since then it has been kept alive in a half dead state by emergency debt creation policies. 40+% of US listed stocks are zombie companies. Is the zombie economy about to to have another heart attack as the real economy is hit by rising energy prices?

Oil rose in price from 1.80 $/bbl. at the end of the 1960’s to 25.81 $/bbl. at the end of the 1970’s. Hard to believe, eh?

https://d15s74raupkmp7.cloudfront.net/editorial/cdd/20190202-cdd-chart-1...

Hold up, you know the whole USD backed system is a pile of shit, yet you dont understand Bitcoin? please have a read of the following article, it references some really great sources:
https://chrisgimmer.com/bitcoin-reserve-asset/#:~:text=Portability%3A%20....

An early sign of coming price inflation is a rising commodity price sector.. im watching it

Great new article from macro investor Lyn Alden on 7 common misconceptions about Bitcoin:
https://www.lynalden.com/misconceptions-about-bitcoin/