US inflation expectations rise; Google hit; China suffers high commodity prices after tariff actions; US steel mills busy; Indonesia retail sinks; UST 10yr at 0.90%; oil and gold lower; NZ$1 = 70.8 USc; TWI-5 = 72.7

Here's our summary of key economic events overnight that affect New Zealand, with news China is learning a hard lesson the US couldn't understand. And there is no certainty China will understand either.

But first in the US, a major NY Fed update of their consumer expectations survey shows inflation expectations rising and now at +3.0%, while earnings expectations are flat at +2.0% for the next twelve months.

Overnight, Google suffered a major global outage for about an hour, with most of its services except search offline. The issue was internal and not a cyber attack. But it does highlight both our dependence on the tech giant, and the fragility of online systems.

China is suffering soaring coal prices as imports are capped, including those from Australia. China is learning the lesson Trump never understood - tariffs are a tax on yourself.

And they are increasingly worried about the rise in iron ore prices and there is a concerted effort to pare them back. Their trade association, regulator, and futures market have all issued pleas for traders to be 'rational' as speculation spikes in this market.

But this may be tough, as American steel mills are on the rise with them 'straining' to keep up with resurgent orders.

October data from Japan for industrial production confirms they are making a recovery, even if it is still weak. It was up +4.0% from the prior month to now be just -3.0% lower than the same month in 2019.

In Indonesia, retail sales dropped significantly in October and are expected to drop further in November in another sign that the nation’s economic recovery is losing steam.

In New York, the S&P500 is up +0.3% in its early week-opening session today. Overnight, European markets were up on average about +0.5% although London fell -0.2%. Yesterday, the large Tokyo market closed its Monday session up +0.3%. Hong Kong fell -0.4%, but Shanghai rose +0.7%. The ASX200 managed a +0.3% gain on the day which the NZX50 Capital Index ended its Monday session down -0.7%, hampered by yet another technical glitch at the start..

The latest global compilation of COVID-19 data is here. The 'news' is all about vaccine rollouts but the global tally just keeps on rising, now 72,417,000 and +496,000 more overnight. At this rate, we will top 100 mln by mid January. It is still very grim in Russia, the UK, Eastern Europe, Brazil, Turkey and Indonesia. It does seem to be easing further in Europe generally although not in the UK, Sweden, or Germany. Global deaths reported now exceed 1,615,000 and up +6,000 in one day as death rates spike everywhere.

But the largest number of reported cases globally are still in the US, which rose +181,000 in one day to 16,765,000. The US remains the global epicenter of the virus. The number of active cases is surging and now at 6,723,000 and that level is up +91,000 on a day, so many more new cases more than recoveries. Their death total now exceeds 306,000. The US now has a COVID death rate of 924/mln, and now well above that in Argentina and approaching the disastrous UK level (943). Broader shutdowns in the US are going to be needed in the short-term even as they roll out their vaccination program.

In Australia, they are not getting any resurgence. There have now been 28,039 COVID-19 cases reported, and that is just +8 more cases over the weekend. Now 48 of their cases are 'active' (-8). Reported deaths are also unchanged at 908.

The UST 10yr yield will start today still just under 0.90%. Their 2-10 rate curve is holding at +78 bps, their 1-5 curve is marginally softer at +27 bps, while their 3m-10 year curve is unchanged at +82 bps. The Australian Govt 10 year yield will start today up +1 bp at 0.97%. The China Govt 10 year yield is also up +1 bp at just on 3.33%, while the New Zealand Govt 10 year yield is down -3 bps at 0.85%.

The price of gold is lower today, down -US$14 to US$1826/oz.

Oil prices are marginally lower today, now just under US$46.50/bbl in the US, while the international price is now under US$50/bbl.

And the Kiwi dollar is marginally softer at 70.8 USc. But a few hours ago it had climbed to 71.2 USc before a sharp settling. Against the Australian dollar we have had a minor softening to just under 94 AUc. Against the euro we are marginally firmer at 58.3 euro cents. That means our TWI-5 is little-changed at 72.7.

The bitcoin price has slipped slightly from this time yesterday, down -0.9% and now at US$19,134. 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 ».