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 ».