Here's our summary of key economic events overnight that affect New Zealand, with news of stronger US economic data contrasting with its main rivals.
This weekend we get the January non-farm payrolls report in the US and a recovery of +50,000 jobs is expected after the unexpected fall in December. Today the pre-cursor ADP Employment report was out and indicated a much stronger rise of +174,000 net new jobs.
Also positive was the widely watched January ISM services PMI which edged higher from an already high level. And that was bolstered by rises in new orders. The equivalent Markit report on services was equally bullish and also finding new orders strong. It also pointed out the sharp rise in business inflation, costs that are being passed on to customers.
In China, their private services sector PMI is weakening and is now approaching a stall. Companies had their weakest increase in business activity for nine months. New orders rose at the softest rate in five months. It is quite the turn-around.
In Europe, inflation has replaced deflation suddenly in January. And the continued rise in the oil price promises to make that trend more pronounced in February.
In Australia, there is a dramatic surge in building consents for houses and an equally dramatic collapse in consents for apartments and townhouses. Data out for December shows a +62% rise on a year-ago basis for houses (and a record high), and a -26% fall for apartment building consents on the same basis.
Things are not so great for Australian office landlords. Six months ago they were struggling with office vacancy rates of a pandemic-induced 9.6%. Things have gotten worse since, with their January rate now at 11.7% and a 24 year high. It ranges from 5% in Hobart to 20% in Perth.
Worldwide, international aircargo volumes are recovering with the latest December data showing it only -2.3% below the same month in 2019 which in the circumstances isn't considered too bad. It was slightly less of a recovery in the Asia/Pacific region (-3.9%). It was North American activity that underpinned this December result. Things are nowhere near as sanguine for passenger travel however with December volumes for international travel down -85%.
Wall Street is posting another rise today with the S&P500 up a more modest +0.3% in early afternoon trade. Overnight European markets rose about +0.5% (although London fell). Yesterday, the very large Tokyo market rose another +1.0%, Hong Kong was up +0.2% but Shanghai retreated -0.5%. The ASX200 rose another +0.9% yesterday while the NZX50 Capital Index turned around an won back +0.4%.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now at 104,043,000 and up +470,000 in one day. It is still very grim everywhere except in our region. Global deaths reported now exceed 2,258,000 and +14,000 since yesterday.
More countries (75) have started their vaccination programs. And although 103.9 doses have been given so far (+2.5 mln more overnight), nowhere has the tide turned on infections - except perhaps in Israel and the USA. However, there is clear evidence the vaccines are working to reduce or even eliminate deaths for those who have taken it.
The largest number of reported cases globally are still in the US, which rose +117,000 overnight for their tally to reach 27,041,000. The US remains the global epicentre of the virus. The number of active cases fell overnight and is now just on 9,828,000 and -7,000 less in one day, so more recoveries than new infections. And there are now more vaccinated people than active cases in the US, which is a milestone. Their death total is up to 459,000 however (+4000). The US now has a COVID death rate of 1381/mln, rising still but made to look 'good' by the disastrous UK level (1606) where deaths are still rising faster (109,000).
In Australia, their community control is impressive. Their all-time cases reported is now 28,829 and only +5 more cases overnight, all new arrivals and all in managed isolation. 55 of these cases are 'active' (unchanged). Reported deaths are also unchanged at 909.
The UST 10yr yield is up another +3 bps at just over 1.13%. Their 2-10 rate curve is steeper at 101 bps, their 1-5 curve is up at +38 bps, while their 3m-10 year curve is also much steeper at +110 bps. The Australian Govt 10 year yield is up +1 bp at 1.18%. The China Govt 10 year yield is also up +2 bps at 3.23%, while the New Zealand Govt 10 year yield is racing higher, up sharp +11 bps at 1.34% and its highest in over a year.
The price of gold will start today down -US$2 at US$1836/oz.
Oil prices are up another +US$1.50 at just on US$56/bbl in the US while the international price is now just over US$58.50/bbl and +US$1 higher.
And the Kiwi dollar will open today up the +½c it gained yesterday at 72 USc. Against the Australian dollar we are also firmer at just on 94.5 AUc. Against the euro we are just under at 59.9 euro cents and also almost a +½c gain. That means our TWI-5 is now up at 73.9.
The bitcoin price has risen again overnight and by another +6.5% and is now at US$37,125 which is near the top of its 24 hour range. Volatility has been a relatively low +/- 3.5%. 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 ».