Here's our summary of key economic events over the weekend that affect New Zealand, with news the world's economies are in quite variable shape. And fortunately, New Zealand is in the group doing quite well at present.
In Japan, their January PMIs aren't showing any real improvement even if there are some positives. They recorded a faster deterioration in business activity in January. Demand weakened further as new business inflows contracted for the twelfth successive month, weighed down by a further fall in export sales. That said, new orders in manufacturing recorded an expansion for the first time in two years.
Things are also not positive for EU or UK businesses in January. In the EU business activity fell at an accelerated rate as companies continued to struggle amid the pandemic restrictions. The rate of factory output growth weakened to the slowest since the recovery began and the service sector saw output fall at the second-fastest rate since May. Even by those dour standards, it is worse in the UK.
However, the internationally benchmarked PMI for Australia recorded a continuing healthy expansion.
And the Aussie rural sector is having a bumper season, especially for wheat and beef. They have been aided on the price front by growing season struggles in other parts of the world. Meanwhile, China's attempt to pressure them with trade restrictions seems to be coming to nought.
But the Aussie retail sales data for December was actually disappointing, down -4.2% pa on a seasonally-adjusted basis from November. However, despite that dip it is still more than +9% higher than for December 2019. Like New Zealand, these retail gains are coming from the closed borders with the locals unable to holiday overseas - that spending is happening locally now. It is a global effect; NZ$85 bln is being redirected this way from travel services to consumer goods - which is the real reason behind the recovery in many factories and the stresses in container shipping.
American factory activity picked up in January built on higher new orders, in fact a 14 year high. Service sector activity improved sharply as well. All this is despite more reports of supply-chain disruption. And a feature is rising producer inflation.
American existing home sales rose more than expected in December. Another -2% fall was expected (like November), but in fact sales rose +0.7% to their highest level in 14 years.
Data for Canadian retail sales in November was also released over the weekend and it was surprisingly upbeat. However, the early numbers for December aren't great because that was when new lockdowns started there.
China said its foreign exchange reserves rose to US$3.217 trillion at the end of last year, +3.5% more than at the same time in 2019.
From China, to Japan, to India, to the US, carmakers are raising prices as electronic chip makers do the same to them as a worldwide shortage spreads of these items at the heart of almost every machine now. Spreading tech may have been the basis of low inflation in the past decade or so, but surprisingly it may now kick off a new round of inflation in this next decade.
The latest global compilation of COVID-19 data is here. The global tally is rising faster, now at 98,924,000 and up +1,141,000 in two days. We are heading for 100 mln probably on Wednesday this week mainly because the UK variant is increasing its grip, and other variants are emerging too. (By some counts we are already at 100 mln.) It is still very grim everywhere except in our region. Global deaths reported now exceed 2,124,000 and +26,000 since this time Saturday as death rates rise everywhere. Only a few countries have yet started their vaccination programs. And although 64 mln doses have been given so far, nowhere is the tide turned on infections or deaths yet - except perhaps in Israel.
But the largest number of reported cases globally are still in the US, which rose +358,000 over the weekend for their tally to reach 25,583,000. The US remains the global epicentre of the virus. The number of active cases rose overnight and is now just on 9,822,000 and +122,000 more than Saturday, so more new infections than recoveries. Their death total is up to 428,000 however (+7000). The US now has a COVID death rate of 1288/mln, awful but made to look 'good' by the disastrous UK level (1438) where deaths are still raging.
In Australia, their community outbreak is back well under control. That takes their all-time cases reported to 28,766, and only +11 more cases over the weekend, all new arrivals and all in managed isolation. 135 of these cases are 'active' (-22). Reported deaths are unchanged at 909.
The UST 10yr yield will start today unchanged at 1.09%. Their 2-10 rate curve has dipped -1 bp to +96 bps, their 1-5 curve is still at +34 bps, and their 3m-10 year curve is also flatter by -1 bp at +101 bps. The Australian Govt 10 year yield is down -1 bp at 1.06%. The China Govt 10 year yield is unchanged at 3.15%, while the New Zealand Govt 10 year yield is also unchanged at 1.09%.
The price of gold will start up +US$2 today at US$1856/oz.
Oil prices are just a little softer at just under US$52/bbl in the US while the international price is now just under US$55/bbl. The rise in US rig counts seems to have petered out.
And the Kiwi dollar will open where it left off on Saturday at just under 71.8 USc. Against the Australian dollar we are marginally firmer at 93.1 AUc. Against the euro we are unchanged at 59 euro cents. That means our TWI-5 is still at 73.2.
The bitcoin price has recovered after briefly dipping below US$29,000 and is now at US$31,917. However that is still -1.3% lower than where we left it on Saturday. Volatility is relatively low at +/- 2.3% 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 ».