Here's our summary of key economic events overnight that affect New Zealand, with news of an increasing gloom and doom mood settling in, in the US and Europe.
The US holiday season retail countdown is on and promotions are everywhere. But the events this year are starting with an air on desperation, even panic. Black Friday (November 27) may end up signaling a black mood.
Meanwhile, US housing starts came in better than expected for October and well above the year-ago level.
And the US regulator, the FAA, has approved the Boeing 737MAX as safe to fly when changes in software, design and training are applied. Given the state of the airline industry, it may be a hollow milestone.
Canadian CPI inflation came in at +0.7% and slightly higher than was anticipated. Rents drove the blip. Core inflation (without food or energy) was at +1.0%. A year ago, Canadian CPI inflation was running at +1.9%.
House prices in Canada rose a record for an October gain.
After making a welcome recovery of +3% in September from a year ago, car registrations in the EU slumped nearly -8% in October in what is a grim indicator for them. That means that in the ten months of 2020, they have sold -25% fewer cars than in the same period in 2019. It was worse in the UK (-31%). That means in Europe, more than 3.3 mln fewer cars have been sold so far this year (and equivalent to selling zero cars in Germany, their largest market). And now Germany is pumping in more than NZ$8 bln to help their car industry cope.
In China, the number of SOE's and other private companies in trouble with their bond obligations continues to grow and markets are bracing for multiple large defaults.
And China is continuing its order sell-down of US Treasury holdings according to September data released overnight. That means its has reduced its holding by -US$40 bln in a year, at a time UST issuance has risen by +US3.1 tln in the same period.
Wage rises in Australia virtually vanished in the September quarter, up just +0.07% pa from the prior quarter. Over the full year it was up +1.4%. That's a record low. The RBA has stated that to generate CPI inflation within its target band, wages will have to grow at a pace of +3.5% to +4%. There is zero indication that is about to happen. (For comparison, in the same September quarter, New Zealand wage growth was +2.7% year-on-year.)
In New York, the S&P500 has risen a marginal +0.2% in midday trade today. Overnight, European markets were up a marginal +0.5%. Yesterday, Tokyo ended its session down -1.1%, Hong Kong was up +0.4%, and Shanghai closed up +0.2%. The ASX200 was up +0.5%, while the NZX50 Capital Index also closed sharply lower, down -1.3%.
The latest global compilation of COVID-19 data is here. The global tally is 55,828,000 and a +584,000 rise from yesterday. It is grim in France, Russia, the UK, Spain and central and southern Italy with very serious stress on their hospital systems. It is even worse in Belgium. Global deaths reported now exceed 1,342,000 and up +11,000 from yesterday.
The largest number of reported cases globally are still in the US, which rose +157,000 since this time yesterday to 11,718,000. The US remains the global epicenter of the virus. The number of active cases is surging at 4,373,000 and that level is up +88,000 in one day, so many more new cases more than recoveries. Hospitalisations jumped +10% in just five days. Their death total now exceeds 255,000 and continuing to rise by more than +1000 a day. The US now has a COVID death rate matching Bolivia, Mexico, and Italy of 768/mln. The UK is no longer in that comparison because it's has shot up to 783/mln.
In Australia, they are not getting any major resurgence. There have now been 27,777 COVID-19 cases reported, and that is just +21 more cases in both NSW and the South Australian cluster. Now 93 of their cases are 'active' (+13). Reported deaths remain unchanged at 907.
The UST 10yr yield will start today unchanged at 0.87% although that is a recovery from 0.84% just a few hours ago. And it has subsequently risen to +0.89%. Their 2-10 rate curve is unchanged at +70 bps, their 1-5 curve is steeper at +29 bps, with their 3m-10 year curve also slightly steeper +81 bps. The Australian Govt 10 year yield is unchanged at 0.92%. The China Govt 10 year yield is also firmer by +3 bps at 3.34%. But the New Zealand Govt 10 year yield is down -6 bps at 0.86%.
The price of gold has fallen -US$7 this morning from this time yesterday and now at US$1879/oz.
Oil prices are higher today on the weakening greenback and by about +US$1/bbl so it is over US$42/bbl in the US, while the international price is now just under US$45/bbl.
And the Kiwi dollar is firmer today at 69.3 USc. Against the Australian dollar we are also firmer at 94.7 AUc. Against the euro we are up as well to 58.4 euro cents. That means our TWI-5 is back up to 72. The Chinese yuan is appreciating faster now.
The bitcoin price is going ever higher, up another +1.3% this morning from this time yesterday, now at US$17,804. 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 ».