Here's our summary of key economic events overnight that affect New Zealand, with news stresses from China's newly booming economy are showing up more now.
But first, in their holiday week, new jobless claims in the US came in lower than the prior week at +714,000 and this lowered the total the number on these benefits to 5.5 mln, a reduction of more than half a million in one week as the pace of benefit expiration rises. For increasing numbers of people they are going into winter and the 'holiday season' with little to cheer about.
Just like the factory sector we reported yesterday, the American services sector is giving mixed signals. The widely-watched local services PMI reported a slower expansion while the internationally benchmarked Markit one reported a slightly faster expansion. But both agree that their services sector is expanding and at a modest to good rate. Sadly, a 'booming' healthcare sector is a key reason these levels are higher.
In China, their private survey of services reported a very good improvement. They had a substantial rise in business activity amid their quickest increase in new orders since April 2010. Employment growth was its strongest since October 2010. But inflationary input costs rose at their sharpest pace for over a decade.
One consequence of the booming Chinese economy is the return of very bad air pollution.
There is a report that China is allowing one cargo of Australian coal that was been waiting since May to unload. It is unsure whether this is signals a change in policy, or just one buyer managing to manipulate their system.
And the spot price for iron ore jumped to US$136.29 in a boost for Australia and at the expense of Chinese buyers.
And even in advance of that overnight jump, Australia reported another great trade surplus on goods and services yesterday, up to +AU$5.2 bln for October and taking the twelve month total to a massive AU$74 bln and +17% higher than the banner 2019 result.
Meanwhile, the services sector in Australia expanded faster in November but it is still only at a modest rate.
Wall Street is up a minor +0.1% in early afternoon Thursday trade for the S&P500. Overnight European markets were generally lower by about -0.3%. Yesterday, Tokyo closed flat, Hong Kong rose +0.7% while Shanghai closed down -0.2%. The ASX200 was up +0.4% while the NZX50 Capital index closed -0.6% on the day.
The latest global compilation of COVID-19 data is here. The global tally is 64,724,000 and a +626,000 rise overnight. It is very grim in Russia, the UK, Brazil and Italy with great stress on their hospital systems. It does seem to be easing further in Belgium, France and Spain. Global deaths reported now exceed 1,497,000 and up +12,000 in one day.
The largest number of reported cases globally are still in the US, which rose +214,000 overnight to 14,355,000 and a faster pace of increase. The US remains the global epicenter of the virus. The number of active cases is surging however at 5,602,000 and that level is up +93,000 in one day, so many more new cases more than recoveries. Hospitalisations are becoming a very major concern. Their death total now exceeds 281,000 and its pace is rising quickly again. The US now has a COVID death rate of 845/mln and the seventh highest in the world.
In Australia, they are not getting any resurgence. There have now been 27,939 COVID-19 cases reported, and that is just +16 more cases yesterday. Now 52 of their cases are 'active' (unchanged). Reported deaths are unchanged at 908.
The UST 10yr yield will start today lower at 0.92% and a -3 bps retreat. Their 2-10 rate curve is flatter at +76 bps, their 1-5 curve is also flatter at +29 bps, with their 3m-10 year curve is again much flatter at +84 bps. The Australian Govt 10 year yield is holding at 1.01%. The China Govt 10 year yield is also unchanged at 3.33%, and the New Zealand Govt 10 year yield is softish, down -1 bp at 0.90%.
The price of gold is up another +US$4 to US$1833/oz.
Oil prices are unchanged today, and still just under US$45.50/bbl in the US, while the international price is still just under US$48.50/bbl. OPEC says it will add supply in the new year.
And the Kiwi dollar has firmed overnight to 70.8 USc and a new high since April 2018. Against the Australian dollar we have fallen back slightly to 95.2 AUc. Against the euro we are holding at 58.3 euro cents. That means our TWI-5 is unchanged at 72.8.
The bitcoin price has risen overnight, now at US$19,387 and a +2.4% rise from this time yesterday. 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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48 Comments
https://www.nzherald.co.nz/business/matthew-hooton-who-will-lead-us-if-…
Does NZ have leaders ????
NZ has no leaders but politicians.........whose sole goal is survival and vote bank politics. Adjectives that best describe them : Thick Skin, Shameless, Biased, Vested, Manipulators, Liars, Not True To Anyone, Power Greedy $#@$...........
People thought JA could be a leader but ......on first term many gave benifit of doubts to her, for her failure to Winston Peter / Compulsion of MMP but in just a month after gaining absolute majority realized that is as holow and selfish as other politicians but is Good and know how to smile (or now seems laughing at others) and an expert in photo opportunity to be splashed.
Not by the current government (or the last) - glad you agree,
A hard decision is where you are making a decision where there are REAL winners and losers - eg housing. In the case of housing, I would argue the current government has made a decision not to make a decision for fear of alienating a certain portion of the population.
No leadership? What about our world leading response to covid? I consider myself the be very fortunate to be In NZ right now. The fact people are complaining about house price inflation (I’m one of them) rather than than an over run health system like other western nations speaks volumes. No doubt Labour/JA was under immense pressure to open boarders and ease lockdowns but she listened to the experts, made an informed decision and stuck to it, all whilst getting the majority on kiwis onboard with the vision. That’s leadership.
Helen Clark Foundation and NZIER want minimum wage pegged to the living wage.
Ironically, countries with the least income inequality and generally high labour productivity in the OECD (Finland, Sweden, Denmark, Norway, Iceland, Austria and Switzerland) have no general minimum wage.
The question should be asked - "why are the fawning MSM giving a failed PM and failed UN aspirational exposure in the first place? NZ rejected Clark definitively. so why are we subjected to her jibberjabber now. She's a "has been"and should stay in the history books.
Workers are sought after in those countries so no need for a minimum wage.
But that system has been subverted in this country by employers bringing in immigrant workers to undermine the bargaining power of New Zealand workers.
The one and only thing I admire of our current government was the recent comment of David Parker to employers wingeing about the lack of foreign workers.
He told them "Meet the market"
Yet funnily enough here is an article saying the exact opposite of that.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12387495
But it won't be anything to do with getting paid a bit more now will it folks...
Smug Parker knows he has "the market" by the balls and knows what he will claw back from a worker payrise. Got to keep those workers dependent on the state and voting for kindness. https://www.stuff.co.nz/national/104490079/when-a-16k-payrise-only-give…
Actually as boomers voted in the WFF and accommodation supplement policies as a form of socialism for landlords who are mostly boomers... before you cast stones on younger generations, remember they didn't create or vote for these policies.
The answer to all this is a UBI to remove the welfare trap. But as boomers are too scared of anything new...
Some of your benefit is actually most - 70% in fact. Any wonder we cant find fruit pickers?
Yet those on Nat Super can cruise around in the campers doing a bit of orchard work over summer and keep all but normal tax off.
I suspect a UBI would result in no shortage of seasonal workers....they too would get a camper and go picking!
Least self-aware comment ever right here.
Boomer? Free education, cheap housing from the parents' generation's efforts, family benefit, generous bursaries, landlord benefits (accommodation supplement, WFF), non-means tested pension, gold card for free travel, additional winter heating payments, wealth transfers through monetary and housing policy...but apparently it's others who are the entitled welfare beneficiaries.
Will Parker be happy that they meet the market again when cheap import labour comes back? Or does that retoric vanish when it no longer suits?
If I was in need of such labour then I would be saying no problem Parko. I will meet the market now as long as you commit to not meddling with it later.
Can't have it both ways, supporting the employers now when labour market is costly is one manipulation. Artificially raising the minimum when labour market is cheap is another manipulation.
Tony Alexander had it right again when he recently said the government and others must resist employers' efforts to keep wages down by bringing in foreign cheap workers in the time honoured manner. Maybe it is time to find out what can be done, and at what cost, by the workers we have here. This will of course put the kybosh on all the government's "shovel ready" projects, and whatever budget housing projects that were voted on in October. And dairy farm expansion. One good thing. And house price reduction, although that was never going to happen anyway.
Those virtuous, kind government types resisting employers. What heroes. Do we just ignore successive governments efforts to keep wages down? "When Sue* got a promotion and $16,000 pay-rise, she thought she would be able to start saving and eventually take her three children on holiday. Instead, tax credits and subsidies decreased for the solo mother, leaving her only about $50 a week better off despite moving into full-time work."
https://www.stuff.co.nz/national/104490079/when-a-16k-payrise-only-give…
But first, in their holiday week, new jobless claims in the US came in lower than the prior week at +714,000 and this lowered the total the number on these benefits to 5.5 mln, a reduction of more than half a million in one week as the pace of benefit expiration rises.
In the 21st century, we like to think of ourselves and our “experts” as having conquered all such boundaries of ignorance; when the people of America, for example, faced the Long Depression of the 1870’s they didn’t know where it came from or why it seemed to just stick around and create misery for so long. Surely modern Economists would’ve filled in all the gaps by now?
Except, no. Not remotely. Instead, what happened is the embedded expectations for econometrics – that business cycles of the post-war economy (1945 to ~2000) were some new kind of different template from which it was assumed (by Economists) no economy would ever again deviate. This subjective interpretation was even hard-wired (no unit root) into the statistical models that dominate the discipline, therefore drive the public’s opinions on such matters.
But when confronted by a real-world set of outright contradictory evidence, drawn from allegedly different, far-flung economies all over the world, Economists refuse to rethink their post-war master. In the face of constant, uniform “L’s”, they reclassified Y to Z as “recovery” anyway. Changed its meaning entirely.
In order to pull off such a dastardly feat, all that was required was to further rewrite economic “potential” and to obscure when this modification needed to be introduced. In the real-world data, that has literally meant downward revisions in economic potential the world over, especially the United States, beginning, interestingly, right at 2008.
Who in the public would ever notice? Quite predictably, hardly anyone has.
Link
Last week we talked about lazy thinking saw examples of it.
Here we got lazy journalism, lazy reporting.
If "news" worthy, why not publish in Stuff?
https://mobile.twitter.com/henrycooke/status/1334613880677404672
Maybe Stuff is so stuffed the reporters have been forced onto twitter.
I see this a lot in the daily updates: "It is very grim in Russia, the UK, Brazil and Italy with great stress on their hospital systems." Is there any source for this? The one I'm watching closely is the UK, and according to the Daily Mail: "NHS England figures show that there are thousands more hospital beds spare this year than last winter. "
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