US jobless claims stay high and relief deal not yet done; US personal incomes fall; China's power outages expand; Brexit optimism; Aussie trade surplus shrinks; UST 10yr at 0.96%; oil and gold rise; NZ$1 = 71 USc; TWI-5 = 72.7

US jobless claims stay high and relief deal not yet done; US personal incomes fall; China's power outages expand; Brexit optimism; Aussie trade surplus shrinks; UST 10yr at 0.96%; oil and gold rise; NZ$1 = 71 USc; TWI-5 = 72.7

Here's our summary of key economic events overnight that affect New Zealand, with news the giant US economy is limping into the New Year.

American initial jobless claims came in marginally lower than expected at +869,000 for last week, but the prior week data was revised higher. Now 5.4 mln people are on these benefits and a small decrease from the prior week. Both houses of Congress have passed legislation to expend these benefits, but the President doesn't seem to want to sign off on it. More negotiation may be needed, and that will take time, delaying getting relief to millions who desperately need it. His desire to leave a mess at the end of his term may also mean a Federal Government shutdown.

US durable goods orders for November came in with a modest rise over October and are now +3.5% higher than for the same month a year ago. The important non-defence capital goods order level is +4.0% higher than for November 2019. In the circumstances, these are good results.

New home sales are strong too, up more than +20% above year-ago levels even if they did drop sharply from October levels.

However, not all data is good. Personal disposable incomes fell -1.2% in November and that is the third month in the last four recording a decline. Over that period the net decline exceeds -4.2%. That is despite pandemic relief payments. And spending is being curtailed, falling -0.4% in November from October and the first such month-on-month fall since April. However, they have been spending less consistently on a year-on-year basis, especially for Services.

With this data, it not a surprise to hear sentiment is struggling. Today's survey is the University of Michigan one which is marginally above the Conference Board one we reported yesterday, but still almost -19% lower than for December 2019.

Canada reports monthly GDP data, and for October it said its growth recovery continued even if at a slower pace. But they are still -4% below year-ago levels.

The World Bank is warning that China must not pull-back from its stimulus programs too early, reinforcing the view that the Middle Kingdom is expanding in an artificial way that may not yet be sustainable.

China's power blackouts seem to be expanding, and it is dawning on many that the issue may be much deeper than just imports of Australian coal.

China may be the global engine of growth at present, but that is not saving its commercial real estate sector. Beijing's office vacancy rate is now at a 10-year high, severely depressing rents. It hit 19% average vacancy at the end of 2020 because of the pandemic and an increase in supply, Colliers International is reporting.

Data out of Taiwan shows factory production up +8.2% on a year-on-year basis to November, although retail sales only rose +2.8% on that same basis.

Vietnam has imposed 25% tariffs on steel imports from China. These neighbours have a very long-standing uneasy relationship.

In Europe, there is increasing optimism a Brexit deal can be achieved with both side giving upbeat commentary. But there is no deal yet, even if financial markets are acting as though there is.

In Australia, they reported a trade surplus of +A$1.9 bln in November, down sharply from +A$4.7 bln in October as trade bans by China started to bite. Exports rose just +1% from October but are now -4% lower year-on-year and became much more focused just on iron ore. Coal exports collapsed. Rural exports fell sharply too. Imports rose +10% year-on-year, although strong imports of capital goods bolstered this data.

Wall Street is up +0.6% afternoon trade today. Overnight most European markets had very good sessions again, up another +1.2%, although London only rose about half that. These gains were on the basis that 'progress' was being made on Brexit. Yesterday, the Shanghai equity market finished up +0.8%, Hong Kong was +0.9% higher and Tokyo closed +0.3%. All three are only a partial recovery of the Tuesday drop. Locally, the ASX200 rose +0.7% and also only making back part of the prior fall, while the NZX50 Capital Index was again up impressively, this time another +1.4%.

The latest global compilation of COVID-19 data is here. The global tally just keeps on rising, now at 78,264,000 and up +707,000 in one day. We are heading for 100 mln within 30 days. It is very grim in Russia, the UK, Eastern Europe, Brazil, Turkey and Indonesia. It does seem to be easing further in Europe, although not in the UK, Sweden, or Germany. Global deaths reported now exceed 1,722,000 and up +15,000 since this time yesterday as death rates spike everywhere. The UK variant strain is now spreading worldwide, although only small numbers of cases are being reported so far.

But the largest number of reported cases globally are still in the US, which rose +209,000 overnight for their tally to reach 18,707,000. The US remains the global epicenter of the virus. The number of active cases is still rising and now at 7,426,000 and that level is up +64,000 in one day, so many more new cases more than recoveries. Their death total is up +4000 to 331,000. The US now has a COVID death rate of 998/mln and approaching the disastrous UK level (1015).

In Australia, their Sydney-based community resurgence seems to be stretching out a bit. There have now been 28,238 COVID-19 cases reported, and that is +19 more cases overnight. Parts of Sydney remain in lockdown. Other states have closed their borders. Now 146 of their cases are 'active' (+7). Their fast reaction has yet to be shown to be effective and the impacts will linger. Reported deaths are unchanged at this stage at 908.

The UST 10yr yield will start today a lot firmer at just under 0.96%, a +4 bps rise. Their 2-10 rate curve is steeper at +84 bps, their 1-5 curve is also up to +29 bps, while their 3m-10 year curve is also steeper at +89 bps. The Australian Govt 10 year yield is up +3 bps at 0.98%. The China Govt 10 year yield is down another -2 bps at 3.27%, while the New Zealand Govt 10 year yield is down almost -2 bps at just over 0.95%.

The price of gold is up +US$10 today recovering some of yesterday's fall to be now at US$1874/oz. Silver is up too.

Oil prices have risen +US$1.50/bbl and are now just over US$48.50/bbl in the US, while the international price is up to just on US$51.50/bbl.

And the Kiwi dollar is back up to 71.0 USc and making back all of yesterday's ½c drop. Against the Australian dollar we are holding firm at 93.6 AUc. Against the euro we are up almost +½c to 58.2 euro cents. That means our TWI-5 is now at 72.7.

The bitcoin price is settled at its new very high level and is now at US$23,478, a +0.4% rise from this time yesterday. The bitcoin rate is charted in the exchange rate set below.

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41 Comments

"President ... desire to leave a mess at the end of his term may also mean a Federal Government shutdown."
My feeling too. At the outset we got the Trump bounce.. could be the Trump dump shortly.
Merry Xmas to all, have an enjoyable break.

Marvelous mindreading.....
Remember both Trump & AOC say $2,000 better than $600.
Merry Christmas.
Fortunately the massive low slow contrast Biden is making now, will see the Trump Derangement Syndrome dissappear.
Merry Christmas & get better soon.

25
up

What will fill the empty void in so many people's lives once they are unable to make deranged rantings about Trump?

What will fill the empty void in peoples lives once they are unable to read Trump's deranged rantings?

They've actually started finding entertainment in reading the deranged rantings of Trump supporters, from the looks of things. The ones who want a coup, martial law, who believe the election was stolen and that one day evidence will be produced in court etc. The ones who have donated their own money to Trump's election lawsuit fund only to find it's just a personal slush fund.

Yep Rick And that demoncrat view is pretty troubling in the US.

A large portion of voters in US think the election was stolen & they think they have evidence.
They see no court, no judge hearing any evidence.
They see the Democrats say "get over it", the Democrats are telling them, they don't matter, just as you have described in your post.

Mind you for Europe, China & Russia, Biden would be preferred candidate.
For NZ, the Ardern government is firmly in the Hilary Democrat camp, for NZ, who knows which man would be best?

Rick, here is a little more context & contrast for you.

No one left to lie to.
https://youtu.be/6RqFXJ00zlk
- for mine the use of military force aligned to the Court process & and the State execution, beggars..

Clintonism' is not an idea, or a program; still less is it a principle. It represents what might be termed - were it not for its murk - the distilled essence of consensus politics. Unremarkable in its constituent elements, which are a mixture of opportunist statecraft, crony capitalism, 'divide and rule' identity politics, and populist manipulation,

https://www.amazon.com/One-Left-Lie-Triangulations-Jefferson-ebook/dp/B0...

In No One Left to Lie To, Hitchens profiles the rise and decline of some prominent Clintonoids, from George Stephanopoulos to the First Lady. He scrutinizes the debased new language in which the discourse of Clintonism has been couched, and proposes that, if successful, the Clinton machine will become the model of pseudo-democracy for the coming century.

Wow, 25 likes, makes you wonder doesn’t it. How can so many people not see that Trump is a total loonie

Oddly enough I think his criticisms of that package are valid - check out the 'pork' he wants out;

https://www.zerohedge.com/political/pork-city-here-are-most-ridiculous-p...

He stood back and took no interest and let Muchin negotiate (instead spending his time on twitter spreading nonsense). Now it's all done he sticks his beak in. Pure politics by an increasingly desperate looser.

Umm, many aware of, see it as more negotiation.
Do you negotiate?
Can you see what he is doing?

I wonder if he will fare as well as his last shutdown negotiations? I find it startling that some still believe Trump's hype about being a great negotiator.

"Longest shutdown in history ends after Trump relents on wall:"

https://www.politico.com/story/2019/01/25/trump-shutdown-announcement-11...

Trump is kidding, big emphasis on 'kid'

Anyone else shorting Ripple / XRP token? Its a complete bonfire and with Christmas coming, all their lawyers are on holiday so no time to get a settlement with the SEC

Making a trifle...ignoring the news for a day or so...suggest the world does the same..merry Xmas!

Just exited at +160% return. That's christmas paid for!

XRP is up 90% in 24 hours from the bottom to current price. The SEC action only applies to the U.S. The Japanese CEO might a public statement about this yday.

https://twitter.com/stephendpalley/status/1341481715622146055?s=20
Bit of an overview of the legal papers served to ripple.
Def interesting to see how much they have dumped on their bag holders lol

The proposed payment to Imran Khan & friends shown in a different light.
Read reports and see the comments coming out of our friends in India.

https://m.timesofindia.com/world/us/us-stimulus-stimulates-anger-against...

14
up

We had 5mm of rain last night the first rain for December, I have lots of feed thanks to rain in November but this is still unusual December is meant to be our second wettest month, no ones hay got wet this year.

I don't like these lockdowns in our markets, I sold half my cattle, I will fatten and kill the rest, from now on it's a super conservative system, buy and sell on same market, I will replace with a handful of lambs to carry into June and then some calves which I won't buy till April, then another hundred calves which will nearly nearly be one year old bulls end of June after I sell the lambs.

Calf rearers have done it tough again, eventually this will be a major weakness for farmers like me. Looks like I can make a $600 margin trading to animals a year younger but this time of year I have at least 2 months of dry ahead of me.

The regenerative crop from Autumn is looking great and cattle are piling on weight on it, the crop in Spring has struggled with so little rain, Im still hoping for a decent thunderstorm soon, I live in hope. The rest of the time i'm like the old man who had many many problems in his life, most of which never happened.

Went to our local town yesterday, a drunk guy was sleeping outside the supermarket, couple of other down and outs, life is full of inequality suspect it has always been so. I was up early on Tuesday to deliver a boat for a friend, I got to the local BP at 6.30am and it was full of shearers and truck drivers buying meat pies, i felt conspicuous in my ute with this classic 60's ski boat, with a huge engine on the back designed to do one thing well and which I suspect still is really good at it, go like hell from the moment you hit the throttle, they don't built them like that any more, I fell in love with it.

Have a great Christmas we have all the children hime for the first time in ages, it's noisey and fun, grandchildren are loving having 4 aunts, I finished the pool ,mowed the lawn, blew the court down and now want another holiday.

Thanks David for allowing me to express opinions which I know you don't always agree with and all the best to the team at interest.co

Happy Xmas with the whole 'crew'! Wonderful blessing at this particular time to have all family in-country.

Glad the regen Autumn crop went great. Love your updates from the farm.

Take Care!

What she said.

Keep them coming next year please Andrew.

And enjoy having all the family home, a good way to finish a year that hasn't panned out as expected.

Aj, always enjoy your comments about life on the farm and your perspective on the future.
Merry Xmas to all.

Is this market led indecision causing you, or your land really, to lose productivity?

No, im still managing to chew the grass down, productivity and profits are not always linked as closely as one would like

Haha, ain't that the truth. Always appreciate hearing what's happening elsewhere, thanks.
Kids and grandkids and getting together doing stuff are just the best , enjoy.

Best wishes for the - er - Festive season, may the dark clouds heading north off Banks Peninsula as I type save some mm for you and yours, and have a prosperous New Year.

ha, we just got 12mm in a small thunder storm, things are looking up. The plants in the regen crop grow in seasons like this and I don't lose feed quality, getting me thinking about growing different plants.

All the best for the season, and may next year be a prosperous one for you.

We got 3 mm last night and a further 1mm this morn

Currently down in the Queenstown region on holiday.
In passing interested to see how Queenstown was surviving without international tourism.
Other than observing, I spoke to a number of workers (shop assistant, hotel staff, waitresses etc) as they aren’t stupid, are aware of what is happening and don’t have a vested interest so are open (I always find owners and managers tend to put a positive face-saving spin on things).
Come to the conclusion that those of us in the North probably have a selective perception of Queenstown not recognising it’s diverse economic base: not only international tourism but domestic as well and also a large very rich retired population, the rich who play the golf courses, viticulture and vineyards, weddings, and a large construction industry among other infrastructure.
Queenstown CBD retailing - which appeals to international tourism - was subdued with smaller retailers having sales despite in being pre-Christmas and the tourist activities (Kawera Jet etc) dead.
However the new very large Five Mile Shopping Centre was going gangbusters. Hard to get a carpark despite acres of parking and most seemed to be buying as nearly all were carrying shopping bags.
Spent a few days in the Glenorchy (LOTR territory) - which tends to have many international tourists and day trippers - and that seems very hard hit with a least one of the few restaurants not opening since winter and those open very quite.
Had an overnight trip up the Routeburn and that was surprisingly busy with mainly locals but some internationals who had been “stranded” here since Covid. A group of about 30 locals on a guided walk passed through.
Also spent a day up the Dart River. Very dead; saw only a couple of others and the state of the track and vegetation indicated very little use. Great to appreciate this environment without the deep throated roar of the Dart Jetboats every 20 minutes - so some positive there.
Currently sitting in a large cafe that is full and had a winery lunch yesterday for which we had fortunately booked.
At the time of Covid the perception was that Queenstown would be an economic ghost town. While housing initially fell it has recovered somewhat and given the range and level of activity that is not surprising. Not surprising is that rents were hard hit and given the exodus of foreign workers in hospitality. Spoke to four or five locals working in hospitality and all had the common comment that it was easy for locals to pick up work in that area.
Stepson lives not far out of Queenstown and is involved in property as a multi-owner. In the past month he has sold two properties very quickly and obtained more than expected. A month or two ago he was looking at another property for him to live in but missed out and commented that it would now fetch considerably more - so property here is seemingly hot like elsewhere.
I’m down for another couple of weeks - mainly in the Te Anau area - so will be interested to see impact of post Christmas local tourism both there and in Queenstown.
In the mean time there is no need to feel sorry fo the majority living here - beautiful country and economically still seemingly humming for most.

"...deep throated roar of the Dart Jetboats..."
What ARE those jet boats doing??

P8, I spent some time in Qtown 10 days ago, admittedly it was before the busy season but I was surprised how quiet downtown was, there were many carparks available (a rarity) and the Mall was very sparse. Got my accommodation at 50% discount and a great deal on helicopter ride to the Remarkables and tour over lake Wakatipu ($150 instead of $280pp). It will most likely be better over X-mas and NY but I don't think it will last long after Kiwis return to work, Q town will miss the international travellers.
Have a happy X-mas

I'm on the road this afternoon and have past two accidents in one hour. These would have been fatals 30 years ago. But don't rely on your modern cars to save you guys and girls, be safe out there eh!

Here is a Christmas Story, but more of Scrooge...
Great to see a Government Agency telling people what they see & experience is not really the reality.

https://i.stuff.co.nz/national/123810093/demand-for-windscreen-repairs-s...

McSaveney said the road should not have opened before the chip seal was properly bedded in.
“They’ve obviously rushed it to get it open ... one of our customers who used to work on the roads said it was shocking.”
Given the time of year and high number of windscreens being damaged, some people would not be able to get a replacement windscreen until January 13 at the earliest, she said.

A Waka Kotahi NZ Transport Agency spokeswoman said drivers should leave “good following distances” until the chip seal had bedded in.
P.S. its often from oncoming vehicle

Maybe Government really really cannot build the Auckland Light rail?
# lots of impostors.

This is of interest...

What her report fundamentally revealed was the incapacity of the public service leadership to follow orders or anything close to good process. If this malaise is widespread, then reform must be also.

https://www.smh.com.au/national/hotel-quarantine-inquiry-revealed-a-deep...

Scary how much shit driving is out there.
So here here, take care out there.

It's amazing the amount of overloaded cars we passed on our travel to havelock. Common sense ain't that common after all

Eve is confused and says to Adam
Is today the day before Christmas Adam
Adam: No! Its Christmas Eve

Eve is confused and says to Adam
Is today the day before Christmas Adam
Adam: No! Its Christmas Eve

What's the absolute best Christmas gift you can give someone

A broken drum ..... you just can't beat it