US jobless claims signal severe concerns; US housing market avoids mess; China bond issues widen; Aussie jobless rate rises; courts hit insurers hard; UST 10y at 0.84%; oil and gold down; NZ$1 = 69 USc; TWI-5 = 71.8

US jobless claims signal severe concerns; US housing market avoids mess; China bond issues widen; Aussie jobless rate rises; courts hit insurers hard; UST 10y at 0.84%; oil and gold down; NZ$1 = 69 USc; TWI-5 = 71.8

Here's our summary of key economic events overnight that affect New Zealand, with news bad policy decisions are coming back to bite in ruthless ways.

The weekly new jobless claims level came in higher than expected for last week at 742,000, and the prior week was also revised up. Worse, the number of people falling off this support rose sharply and exceeded 300,000 to be down to 6.3 mln. Few will have found work as the pandemic bites very hard now. The November labour force results are going to be very ugly.

The Philly Fed survey factory survey was a positive one even though most scores slipped, but the Kansas City Fed survey wasn't and remains well below year-ago levels.

But the US real estate market is buoyant. Sales volumes are high and prices are rising sharply, up more than +15% in a year. Buyers want 'space' if they are going to be locked down and demand for suburban homes is very strong. This has driven sales levels to their highest since 2005. And helping are mortgage interest rates which are again at new record lows.

Canadian housing sales were similarly strong.

And staying in Canada, the ADP employment report for October shows then still shedding jobs (-80,000) even if not as quickly as in September (-564,000).

In China, their corporate bond market stress is widening, with now a real estate developer in default. Total onshore bond defaults now exceed ¥100 bln across all companies. Offshore bond defaults (defaults on funds raised in overseas markets) are fewer but they are starting to happen as well. Chinese companies are now racing to cancel or postpone bond issues. More than 50 issues worth a combined ¥40 bln were cancelled or postponed between November 10 and 19. Many more are being shelved. It is now a market emitting strong negative odours.

In Turkey, a strongman-ruled country that more than a year ago fired its central bank chief for not cutting interest rates in the way the President wanted because of the risk to their currency, and they installed a family member in that position. It has been a disaster, and today they backtracked sharply, raising interest rates by +4.75% to 15% in an effort to stabilise a sharply worsening financial situation. The country is heading into some tough times, made much worse by those really bad policy mistakes by the President.

Australia's jobless rate rose to 7.0% in October data released late yesterday, from 6.9% (NZ = 5.9% in September.) Full-time employment increased by +97,000 and part-time employment increased by +81,800. Their participation rate rose to 65.8% (NZ = 69.8%.)

And staying in Australia, the NSW Court of Appeal has ruled that pandemic exclusions in business interruption policies are invalid.

In New York, the S&P500 is down -0.2% in early afternoon trade today. Overnight, European markets were down -0.8%. Yesterday, Tokyo ended its session down -0.4%, Hong Kong was down -0.7%, but Shanghai closed up +0.5%. The ASX200 was up +0.2%, but the NZX50 Capital Index also closed lower, down another -0.4% and heading for a flat weekly result.

The latest global compilation of COVID-19 data is here. The global tally is 56,498,000 and a +670,000 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 1,354,000 and up +12,000 from yesterday.

The largest number of reported cases globally are still in the US, which rose +185,000 since this time yesterday to 11,903,000. The US remains the global epicenter of the virus with its leadership in denial and resisting any proper response. The number of active cases is surging at 4,474,000 and that level is up +101,000 in one day, so many more new cases more than recoveries. Hospitalisations jumped +10% in just five days. Their death total now exceeds 257,000 and continuing to rise by much more than +1000 a day. The US now has a COVID death rate matching Bolivia, Mexico, and Italy of 774/mln. The UK is no longer in that comparison because it's has shot up to 791/mln.

In Australia, they are not getting any major resurgence. There have now been 27,784 COVID-19 cases reported, and that is just +7 more cases. Now 94 of their cases are 'active' (+1). Reported deaths remain unchanged at 907.

The UST 10yr yield will start today down -3 bps at 0.84%. Their 2-10 rate curve is a little flatter at +68 bps, their 1-5 curve is marginally flatter too at +28 bps, with their 3m-10 year curve also slightly flatter +29 bps. The Australian Govt 10 year yield is down -3 bps at 0.89%. The China Govt 10 year yield is firmer by +2 bps at 3.36%. But the New Zealand Govt 10 year yield is down another -2 bps at 0.84%.

The price of gold has fallen again and despite the fast-weakening greenback, down by -US$20 this morning from this time yesterday and now at US$1859/oz.

Oil prices are lower today also despite the weakening greenback and by another -US$0.50/bbl so it is just on US$41.50/bbl in the US, while the international price is now just on US$44/bbl.

And the Kiwi dollar is still firm today at 69 USc. Against the Australian dollar we are even firmer, now at 95 AUc. Against the euro we are holding high at 58.3 euro cents. That means our TWI-5 is at 71.8. The Chinese yuan is appreciating faster now against the US dollar but is unchanged against the Kiwi dollar and still in the general range it has been for more than a year now.

The bitcoin price is going ever higher, up another +1.1% this morning from this time yesterday, now at US$18,003. And just a reminder; it's record high was US$19,343 in December 2017. 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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43 Comments

14
up

From the NY Times*
"As the left (and the institutions that represent it) increasingly becomes an intellectual monoculture, it will do more than just drive away talent, as well as significant parts of its audience. It will become more self-certain, more obnoxious to those who don’t share its assumptions, more blinkered and more frequently wrong.

...But worse than making it dull, the purge (or self-purge) of contrarians has made the new left blind.

According to the incessant pronouncements of much of the news media (including a few of my own), Donald Trump is the most anti-Black, anti-Hispanic and anti-woman president in modern memory. Yet the CNN exit poll found that Trump won a majority of the vote of white women against both Hillary Clinton and Joe Biden. He also improved his vote share over 2016 with both Latino and Black voters, while losing most of the advantage he previously had with college-educated white males — precisely the demographic his policies had supposedly done most to favor."
https://www.nytimes.com/2020/11/16/opinion/liberal-media-censoring.html

edit - another sentence added for context. The article is about left wing group think - not the election.

*not the tabloid NY Post

12
up

and your point is......

Trump still lost the election.

Maybe give more time to confirm either way.
There is no rush.

Sixty-one percent (61%) of Republicans say it’s Very Likely the Democrats stole the election, but just as many Democrats (61%) say it’s Not At All Likely. Among unaffiliateds, 29% feel it’s a stolen election; 45% do not.

https://www.rasmussenreports.com/public_content/politics/elections/elect...

https://en.m.wikipedia.org/wiki/1960_United_States_presidential_election...

Some, including Republican legislators and journalists, believed that Kennedy benefited from vote fraud from Mayor Richard Daley's powerful Chicago political machine. [12] Mayor Daley’s machine was known for "delivering whopping Democratic tallies by fair means and foul."[13] Republicans tried and failed to overturn the results at the time—as well as in ten other states.[13] Some journalists also later claimed that mobster Sam Giancana and his Chicago crime syndicate "played a role" in Kennedy's victory. [13] Nixon's campaign staff urged him to pursue recounts and challenge the validity of Kennedy's victory, however, Nixon gave a speech three days after the election stating that he would not contest the election.[14]

12
up

Again what point are you trying to make. Some believe the earth is flat - doesn't make it true. If there has been voter fraud it needs to be proved. The more interesting question is the tens of millions who didn't even vote - what do they think or more likely they simply don't care.

Remember the flat earther who home-built a rocket to prove it, and got himself killed?

Or one could look to history rather than lame flat earth(?!) analogies. Losing a few early court cases is par for the course.

"...The judge decided to hear the case after state election officials and state courts rejected the Republicans' claims.

...In many instances, according to Republicans who testified during a four-day civil trial last week, Democratic campaign workers forged absentee ballots. On many of the ballots, they used the names of people who were living in Puerto Rico or serving time in prison, and in one case, the voter had been dead for some time.

"Substantial evidence was presented establishing massive absentee ballot fraud, deception, intimidation, harassment and forgery," Judge Newcomer wrote in a decision made public today.

...But some election experts noted today that there have been many larger cases of voter fraud in Chicago and Louisiana in the 1970's and Alabama in the 1980's.

The case involving the Philadelphia seat, however, may be the largest example involving fraudulent absentee ballots."

https://www.nytimes.com/1994/02/19/us/vote-fraud-ruling-shifts-pennsylva...

And they cited one lady as being dead, but the press tracked her down and interviewed her. It seems they didn't do their research properly and failed to identify that there were two of the same name and birth year (but not month), or that the SSN was for the living one, not the dead one.

The other thing for me is that despite the supposed requirement for independence and transparency so much of the judiciary seem to polarised by political affiliation. So much for justice!

Do you find it logically consistent that the Dems would have committed open fraud to win the Presidential election, and at the same time done so poorly in the Congressional and Senate elections?

Surely the logical conclusion is the population has retained reasonably high support for the Republican party, and turned against Trump for obvious reasons?

Fair perspective i think.

hehe, yeah the dems filled in fraudulent ballots for Biden, but for the republican senate candidates.

no no no it's obvious don't you see, Bill Gates and Hillary Clinton were too busy running their secret paedophile ring to remember to extend the massive fraud to down-ballot democrats.

"Some believe the earth is flat" - probably 61% of republicans.

"Jeering moral condescension from entitled elites is among the things most people tend to resent.
...The apparent inability of many on the left to entertain the thought that decent human beings might have voted for Trump for sensible reasons — to take one example, the unemployment rate reached record lows before the pandemic hit — amounts to an epic failure to see their fellow Americans with understanding, much less with empathy."
https://www.nytimes.com/2020/11/16/opinion/liberal-media-censoring.html

The unemployment rate had been going down steadily since the GFC, it went down a lot under Obama: https://www.bbc.com/news/business-54029361
To say the republicans have empathy is crazy. If you get sick and don't have health insurance then go die somewhere for all they care.

Aren't the (right wing) republicans all about "personal responsibility"? Don't expect anything from the government (not even healthcare or unemployment benefit). Unless of course you are from the midwest, then you should expect all sorts of special treatment.

confirmed by old Joe Kennedy himself, on record to son John, something like - I’m delivering you an election not a landslide.

It looks like Trump may have won the election by a landslide. The level of democrat voter fraud appears to have been significant https://youtu.be/sq7TeUJwQD4 This could blow up into a big thing.

It looks so how? His legal team has failed to gain any traction and their cases are repeatedly thrown out after as they are repeatedly unable to provide evidence.

14
up

What you'll see is a masterclass in manipulating voters through social media whipping the right into a frenzy. Nothing will go to court though, because there's no proof and just like the last 29 cases brought before the judge, they'll be thrown out due to a complete lack of evidence. Evidence seems to matter little these days though, as we're collectively dumber than we've ever been at any point in modern history.

northman. What are the cases Trump's legal team have lost?

Thanks, Of the six, in Arizona, it looks like the first case replaced the second.
Then everything is still live.
Remember these actions look requests/injunction to pause certification.

Regarding above. Affidavits are direct evidence. You will know when you are in court you make your Affidavit, it is your way of communicating to the court, & you can attach other things (images, papers etc) to the affidavit.

You cannot honestly post a link to Giuliani claiming fraud and expect to be taken seriously.... or is this subtle sarcasm that i missed?

The guy has just been in court admitting to the judge that he is not claiming there was fraud and has no evidence of fraud.

Just when you think Rudy couldn't sink any lower. I can only assume that he's decided that his public reputation is now worth zero, might as well just try to milk this for all it's worth ($20k/day?) and retire quietly.

Hundreds of sworn affidavits testifying that... Trucks arrived late at night with tens of thousands of 100% Biden votes. Voter machines with software "glitches" that mysteriously switched Trump votes to Biden votes. Stacks of Biden rich votes being rammed through the machines multiple times. Voter turnouts corresponding to 200% of the eligible voting population. Vote adjudicators being kept away from the vote counting in Democrat controlled voting locations. It smells pretty rotten to me, particularly the empirical evidence of statistical anomalies and excess voter turnouts.

If any of that is true, they would be winning court cases, rather than losing them all.

They, RG has not been to Court yet with this.

What are the things you think he has lost on?

Hah. I don't think they would dare let Rudy into court these days.

All seems very easy to prove to me, surely they should win at least one case right? How can they not prove for example "Voter turnouts corresponding to 200% of the eligible voting population". How did the dems get away with rigging all of those key states, the only ones that mattered?

It is almost certainly "fake news" obviously designed to get people upset (unless proven otherwise).

Yes, this kind of thing is provable. The most recent example was in 2018 when the Republicans committed fraud in North Carolina - this was discovered by irregularities in the voting number.

"It started with unusual patterns among absentee voting in the district, going back to the primary in which Harris defeated incumbent Rep. Robert Pittenger by just 828 votes. It turns out that Harris won an implausible 96 percent of the absentee votes in Bladen County in the primary."

Perhaps the reason the Republicans are so concerned about electoral fraud is they know exactly how it is done. We are all waiting for actual concrete evidence that the Dems did anything similar this time (and over multiple regions of multiple states, to actually overturn the election), currently all we seem to have is a smear campaign against democracy itself.

https://en.wikipedia.org/wiki/2018_North_Carolina%27s_9th_congressional_...
https://www.washingtonpost.com/blogs/plum-line/wp/2018/12/05/looks-like-...

May...Appears...Could...

The weasel words required by those putting forward claims with zero evidence. It would be hilarious if it wasn't so openly hostile to the democratic process.

And likewise the right wing (esp in the US) are unfortunately aligning themselves with the idiots. No one wants to say it, but the real issue in the US right now is how stupid a large number of their population are. Anyone see that article where a nurse said many people dying of Covid in the US are refusing to believe it because they think it is a hoax, FFS, I doubt other countries have that issue. No wonder these people are struggling to get jobs.

12
up

"No matter if they have five eyes or 10 eyes, if they dare to harm China’s sovereignty, security and development interests, they should beware of their eyes being poked and blinded" - Chinese foreign ministry spokesperson

https://www.stuff.co.nz/world/asia/300163234/china-says-nz-other-five-ey...

As subtle as Genghis Khan. My didn’t his offspring Kublai put some cold hard steel into the succeeding dynasties.

The video of the spokesperson Zhao Li Jian delivering the message is currently trending on DouYin (TikTok) and the number of likes is in billions.

All Chinese approve his message.

Good.

16
up

> All Chinese approve his message.

Do they get a choice in the matter?

Including all Chinese in NZ? One would hope not.

13
up

It's becoming difficult to keep track of all the things China is outraged by. Frankly it's becoming tedious.

I'm not a fan of Chinese cuisine (as presented in NZ, never experienced authentic to be fair). They can add that to the list.

How will NZ respond - hopefully not with aggression? - China seems to be making preparations with Russia, for what I am not sure, as yet.

The Turkish Lira is another dying fiat currency. Inflation rates of 36.57% and climbing, chewing through their reserves down $10b since July.
https://news.bitcoin.com/bitcoin-adoption-turkey-inflation-lira/
If Turkish residents had purchased Bitcoin at anytime in the past, yes even at the very top of the 2017 peak where it was at 75k Turkish Lira they would still be better off today wiht it trading at 135k.
https://www.tradingview.com/symbols/BTCTRY/
Great article published back in October about 13.8%of the worlds currencies have performed worse than Bitcoin affecting almost a billion people, or 12.2% of the planets population. Wealth preservation is key.
https://medium.com/original-crypto-guy/as-bitcoins-price-hits-a-new-all-...

Is this why test positive virus cases communicate to MoH contact tracers via lawyers letters?

"I went to a nice spot and had a massage and I happened to lay on the massage table with my face in that little hole that somebody - who had tested positive [for] COVID - had just been in, right before I went in."

https://www.newshub.co.nz/home/new-zealand/2020/11/covid-19-why-health-o...

Health officials did not warn the public about a COVID-19 case at an Auckland spa because all the close contacts had already been informed.

US actor Wade Williams told CNN on Wednesday night he is quarantining after being exposed to a positive case at an Auckland massage parlour.

Which case?, A, B, C, D, E?

Economic smell from Bad decision David? - We/NZ must act quickly, need more FHB deposit assurance by govt to at least 20%, then complete removal of bright line test, ensuring smooth retiree/elderly funds transitioning from Banks towards more become productive Landlord (managed by reputable agency or govt) - in turn in unison at the same time RBNZ put OCR to negative quickly then add more QE, keep LVR ban & relaxing FLPs into the housing production activity. This will ensure the quick trickle down effect spending. Do It, Do it, Do it..!