Here's our summary of key economic events overnight that affect New Zealand, with news that with Trump's reign about to end, the world is left cleaning up the mess and finding out who were the winners or losers.
Firstly in China, industrial profits in October for their major companies, including their SOEs, have now recovered back to year-ago levels. In fact, they were +0.7% higher than for October 2019 and rose at their fastest pace in nine years.
Meanwhile, China is tightening its pressure on Australia, slapping import duties of between 107% to 212% for Aussie wine and intensifying trade tensions between the two countries.
And don't forget, off the Chinese coast a fleet of 82 ships carrying blacklisted Australian coal worth more than NZ$1.2 bln is held up as Beijing tries to coerce Canberra into kowtowing to its policy positions.
Australia is now readying a trade dispute case against China in the WTO, this one over a earlier ban on barley.
Investment bank analysts at Citibank say that if iron ore were to be drawn into the trade stoush, Australia could lose up to -20% of their exports worth more than AU$76 bln in a year, hit their nominal GDP by -3.8% and take -16c off the value of their currency. It seems an unlikely scenario and most other analysts don't see anything like this actually happening. But that does seem to be the downside risk of standing up to China.
In the US, there are reports that some shopping malls are deserted as the pandemic pushes retail online even faster. Amazon is reported to be trying to hire more workers at the rate of about +3000 per day, and courier deliver companies are struggling to find the drivers to respond to this unprecedented shift. Amazon alone now has more than 1.2 mln employees and has added +427,000 this year alone.
American holiday spending is expected to rise by at least +3.6% this year and surprisingly about the same as the average for the past ten years, but boosted this year by more than a +20% rise in online shopping.
In the EU, they are suffering a new round of pessimism, with sharp falls in both consumer and now business sentiment. Being unable to shake the pandemic as the holiday season approaches is knocking the stuffing out of them, and having to isolate indoors in winter is a grim prospect.
In Switzerland, yet more referenda over the weekend, the first one is aimed at making Swiss companies liable for human rights violations and environmental damage by their subsidiaries abroad. Another referendum sought to ban investing in weapons companies. Both failed at the polls.
The latest global compilation of COVID-19 data is here. The global tally is 62,448,000 and a +1,159,000 rise in the past two days. It is still very grim in Russia, the UK, and Italy with great stress on their hospital systems. It does seem to be easing in Belgium, France and Spain. Global deaths reported now exceed 1,456,000 and up +18,000 in the same past two days.
The largest number of reported cases globally are still in the US, which rose a sharp +361,000 over the weekend to 13,628,000 and picking up the pace if infection again. Holiday travel won't be helping. The US remains the global epicenter of the virus and the consequence of a very bad public health response. The number of active cases is surging at 5,313,000 and that level is up +168,000 in two days, so many more new cases more than recoveries. Hospitalisations have pushed up to 100,000. Their death total now exceeds 272,000. The US now has a COVID death rate of 821/mln and is approaching the Argentine level.
In Australia, they are not getting any major resurgence. There have now been 27,893 COVID-19 cases reported, and that is just +19 more cases over the weekend. Now 68 of their cases are 'active' (-10). Reported deaths remain unchanged at 907.
The UST 10yr yield will start today unchanged at 0.84%. Their 2-10 rate curve is also unchanged at +69 bps, their 1-5 curve is marginally flatter at +26 bps, with their 3m-10 year curve faller too at just over +75 bps. The Australian Govt 10 year yield is unchanged at 0.91%. The China Govt 10 year yield is also unchanged at 3.34%, and the New Zealand Govt 10 year yield is also stable at 0.89%.
The price of gold fell sharply on Friday but has held over the weekend staying low at US$1788/oz. A week ago it was at US$1875 so since then it has declined by -4.6%.
Oil prices are little-changed today at US$45.50/bbl in the US, while the international price is now just under US$48.50/bbl. OPEC and Russia are apparently close to agreeing to keep oil production cuts for another two to three months, a move they hope will keep markets tight even as prices start to recover.
And the Kiwi dollar has stayed high, rising slightly to 70.3 USc this morning. That is a full +1c higher than this time last week. Against the Australian dollar we are unchanged at 95.1 AUc. Against the euro we are also holding at 58.7 euro cents. That means our TWI-5 will start today at 72.7.
The bitcoin price has recovered sharply over the weekend and is now at US$18,064 and that is up +7.5% from where we left it on Saturday. 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 ».