Here's our summary of key economic events overnight that affect New Zealand, with news an adult is back in charge in Washington.
Firstly, we must note that the US has a new President, with the previous one slinking out of Washington in a huff and interestingly, reversing the only move he made to "drain the swamp", a swamp he made much deeper. Expectations are high for Biden, but he has probably the biggest challenges to face of any incoming President. He does seem to have some stocks of goodwill however.
One challenge is the American economy which is stuttering and insecure. Retail sales are sliding, down -2.5% month-on-month in a growing trend. That is similar to the -2.6% we noted last week.
The central bank of Canada issued its Monetary Policy Report overnight. It sees their economy shrinking in first quarter of 2021 as the second pandemic wave delivers a 'serious setback'. They said their 0.25% policy rate will stay that way until their inflation target is achieved.
In China, foreign direct investment into the country climbed +6.2% in 2020 to an all-time high of ¥1 trillion, or NZ$215 bln. Much of it was for service sector investment.
China also reviewed its prime lending rates yesterday but made no change. That takes the run to nine consecutive months of official rate stability, right through their pandemic stress period.
Taiwanese export orders surged again in December and by far more than expected. There were up +38% from the same month a year ago, building on the +30% rise on that basis in November. Analysts had expected a +27% December rise. For the full 2020 year they are up +10%.
In Europe, the practical difficulties of maintaining post-Brexit trade are mounting, and pointing to some rather severe separation pain.
In Australia, the latest review of consumer confidence sees a small pull-back but still maintaining its higher recovery level.
BHP has slashed the value of its remaining coal reserves, a move that will cost it about -AU$1.5 bln. At the same time it raised its estimates for iron ore production.
Wall Street has started today up +1.3%. Overnight European markets were up about +0.5% (although Frankfurt was up +0.8%). Yesterday, Shanghai ended its session up +0.5%, Hong Kong continued its good run, up +1.4%, but Tokyo shed -0.4%. The ASX200 ended up +0.4% but the NZX50 capital Index gained an impressive +1.1% on the day and recovering some earlier-in-the-week weakness.
The latest global compilation of COVID-19 data is here. The global tally is rising faster, now at 96,397,000 and up +671,000 in one day. We are heading for 100 mln early next week now mainly because the UK variant is increasing its grip. It is still very grim everywhere except in our region. Global deaths reported now exceed 2,064,000 and +19,000 since this time yesterday as death rates rise everywhere. No-where yet are vaccines turning the tide.
But the largest number of reported cases globally are still in the US, which rose +202,000 for their tally to reach 24,830,000. The US remains the global epicentre of the virus. The number of active cases rose overnight and is now at 9,628,000 and a slight dip from yesterday, so more recoveries than new cases yesterday. Their death total is up to 412,000 however (+3000). The US now has a COVID death rate of 1241/mln, awful but made to look 'good' by the disastrous UK level (1370) where deaths are surging.
In Australia, their community resurgence is back well under control. That takes their all-time cases reported to 28,740, and only +10 more cases yesterday with all in managed isolation. 86 of these cases are 'active' (-9). Reported deaths are unchanged at 909.
The UST 10yr yield will start today unchanged at 1.10%. Their 2-10 rate curve is up +1 bp at +96 bps, their 1-5 curve is still at +35 bps, and their 3m-10 year curve is also up +1 bp at +102 bps. The Australian Govt 10 year yield is unchanged at 1.05%. The China Govt 10 year yield is also unchanged at 3.19%, while the New Zealand Govt 10 year yield is up +1 bp at 1.03%.
The price of gold is up +US$26 today in New York and now at US$1866/oz and a +1.4% gain. Silver is up a similar amount.
Oil prices are slightly on the firmish side and now just over US$53/bbl in the US while the international price is now just over US$56/bbl.
And the Kiwi dollar is firmer today from this time yesterday at just over 71.6 USc and a +½c net rise. Against the Australian dollar we are firmer as well, but only marginally, at 92.5 AUc. Against the euro we are up to 59.1 euro cents. That means our TWI-5 is now back up at 73.
The bitcoin price is notably lower this morning compared to this time yesterday. It is now at US$34,434 and a drop of -8.0%. Volatility has been high at +/- 6.1% in between. 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 ».