Here's our summary of key economic events over the long holiday weekend night that affect New Zealand, with news bitcoin has taken off again today, propelled by Elon Musk.
But first in the US, consumer inflation expectations are rising slightly and are now at 3.05%. The same survey reports rising consumer optimism, and that includes spending growth expectations which rose to 4.2%, the highest level recorded in more than 5 years.
American consumer debt grew modestly in December with no signs of excess either way. But revolving credit card debt is still shrinking and in quite an extended run that started in early 2019. But car and personal loans are growing to make up the difference.
A year ago, the US and China entered into Phase One of its trade deal. It has largely failed. US exports of the goods targeted in 2020 fell more than -40% short of the target. In addition, the anti-China tariffs failed spectacularly as well of course.
Over the weekend in the US, their January non-farm payrolls report was a lackluster affair, coming in with a +49,000 increase in jobs and almost exactly as expected. Much is being made of the fall in the jobless rate to 6.3% from 6.7% but that is partly because their participation rate slipped to just 61.4%. There are still 7 mln people looking for work. If there is a silver lining in this data is that for those in jobs, average hourly earnings are up +5.4% year-on-year although that is probably 'boosted' by the fall-off by the lower-paid.
The new policymakers in Washington are worried about this jobs data. It bolstered the case for the Biden US$1.9 tln pandemic stimulus plan. And their Senate voted 51-50, after Vice President Kamala Harris broke her first tie, to adopt the budget blueprint for the Biden plan.
Canada reported January jobs data as well and it wasn't very good either; worse in fact. They shed -213,000 jobs when a -50,000 decrease was expected. Their jobless rate jumped to a worrying 9.4%. Their participation rate fell too, to 64.7%. They too are having issues with holding on to low-paid positions and you can see th effect when the average earnings went up +5.9% in 2020.
Singapore reported December retail sales overnight and they were very weak, dropping on both a month-on-month basis and a year-on-year basis.
The Chinese new year festival will formally start on February 11th and go on till February 26th. Things are winding down there already.
Coal prices in China might be starting to slip, but iron ore prices are remaining stubbornly high. And food prices are staying high too, a special risk for Beijing in a holiday period.
China's food security issues are not easing. In fact they are approaching emergency levels in the South. Rainfall since the end of 2020 in regions south of the Yangtze River was 50-80% less than usual and distributed very unevenly. Now authorities have imposed emergency restrictions on industrial water use. You will recall, this is the area we reported severe and threatening flooding in July last year.
China is again warning its citizens not to study in Australia due to 'great risks' like the pandemic and racial discrimination. This is being seen as just part of Beijing's attempt to get Canberra to toe its policy line.
In Australia, their new-found effort to transition to carbon-free will likely see their trade-exposed emissions-intensive industries, including the farming sector, carved out of any plan to reach net zero emissions by 2050.
Turnover of housing might be about to zoom higher in NSW, if a plan by their government to abolish Stamp Duty gets over the line. Property sales could surge by an extra 100,000 transactions each year in the State according to official estimates. Real estate activity is already very strong in Australia so adding that sort of demand without adding supply will come with obvious impacts.
On Wall Street the S&P500 is up +0.3%. Overnight European markets were also up about +0.3%. Yesterday Shanghai rose +1.0%, Hong Kong was up only +0.1%, but the very large Tokyo market has an impressive +2.1% gain. The ASX200 gained +0.6% and of course the NZX was closed yesterday.
The latest global compilation of COVID-19 data is here. The global tally is still rising, now at 106,278,000 and up +278,000 in one day. The pandemic seems to be easing in many places now. Global deaths reported now exceed [2,320,000] and +6,000 since yesterday.
More countries (83) have started their vaccination programs. And although 130.8 mln 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 +21,000 overnight for their tally to reach 27,617,000. The US remains the global epicentre of the virus although there is a clear easing. The number of active cases fell overnight and is now just on 9,787,000 and 3,000 less in one day, so more recoveries than new infections. Their death total is little-changed at 475,000 as the vaccination program kicks in. We now wait to see if there is any Superbowl party super spreading data. The US now has a COVID death rate of 1430/mln, and that compares to the disastrous UK level (1656) where deaths are also still rising (113,000, +1000 overnight).
In Australia, their community control is impressive. Their all-time cases reported is now 28,857 and only +7 more cases overnight, all from new arrivals and all in managed isolation. 51 of these cases are 'active' (+1). Reported deaths are unchanged at 909.
The UST 10yr yield is down another -1 bp from Friday at just under 1.16% although over the weekend it did rise to 1.20%. Their 2-10 rate curve is steeper at 105 bps, their 1-5 curve is up at +40 bps, while their 3m-10 year curve is also steeper at +113 bps. The Australian Govt 10 year yield is up +1 bp at 1.24%. The China Govt 10 year yield is also up +1 bp at 3.26%, while the New Zealand Govt 10 year yield is holding at 1.38%.
The price of gold will start today with a +US$22 bounce-back at US$1837/oz. Silver has rallied more.
Oil prices are slightly higher at just under US$58/bbl in the US, while the international price is now just over US$60/bbl. These represent a rise of about +US$1/bbl and are now at pre-pandemic levels. The combination of OPEC supply cuts and new American stimulus are driving the rise.
And the Kiwi dollar will open today having risen back to 72.2 USc. Against the Australian dollar we are softer at 93.8 AUc. Against the euro we are still just on 60 euro cents. That means our TWI-5 is up to 73.9 and back where it was about a week ago.
The bitcoin price has risen sharply again overnight and is now well above US$40,000 again. It is now at US$43,243 and up by almost +12% in a day. In New Zealand currency it has touched NZ$60,000. Tesla said it may start accept bitcoin as a payment method for its products, which has sent the price soaring. Volatility has been very high at +/- 9.3%. 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 ».